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December 18, 2002 --- Vol. 8, No. 132December 2002

Forest may explore deeper horizons at Redoubt

In addition to development plans for its Cook Inlet Redoubt Shoal field, Forest Oil Corp. has told the state it will continue to evaluate shallow gas and also evaluate oil potential below the Hemlock reservoir it is currently developing.

The Alaska Division of Oil and Gas has approved an application from Forest Oil defining the area expected to produce oil at the Redoubt Shoal unit in Cook Inlet, where production started Dec. 9.

The approved "Hemlock participating area" — the area from which Forest will be producing — includes some 6,520 acres in the Hemlock reservoir on portions of four state oil and gas leases, and is two miles southeast of West Foreland and 16 miles northwest of Kenai.

In addition to short-term development plans, the state said Forest has long-term exploration plans for Redoubt, including further evaluation of shallow gas reserves, evaluating oil potential below the Hemlock reservoir and evaluating acreage outside the proposed participating area.

The company's second plan of development for Redoubt (work planned for Aug. 15, 2002, through Aug. 14, 2003) includes continuing development drilling, including further delineation of the extent of the accumulation within the main fault blocks; preparing for water injection pressure maintenance; determining the productive potential of northern accumulations; completing the installation of pipelines and surface production facilities; obtaining approval of initial participating area and pool rules; and continuing to meet local hire commitments.

Forest is also doing long-term planning for managing water injection, which is expected to begin 18-24 months after the field reaches design oil production rates.

On the exploration side, the division said Forest has indicated that a deep test — looking for oil beneath the Hemlock reservoir — is likely to occur in the 2005-2006 timeframe. Exploratory drilling to evaluate acreage outside the proposed Hemlock participating area would only occur when well slots are available, probably in the 2008-2010 timeframe.

Talisman takes first step into Canadian Arctic

Talisman Energy Inc., the Canadian independent with a vast array of international holdings, has turned its attention to the Arctic.

In a “very preliminary” move, the company has taken a minority role in a partnership that plans to drill a well on the Mackenzie Delta in 2003, Talisman spokesman Barry Nelson told PNA Dec. 18.

The company was not in a position to disclose its partners and had not yet chosen a well location, he said.

But Talisman’s tentative emergence in the Arctic adds to the ranks of E&P companies who operate outside the Mackenzie Delta Producers Group.

The partnership of Petro-Canada and Devon has scheduled an offset well for January to get a better reading on this year’s Tuk M-18 discovery well, which has reserves estimated at about 300 billion cubic feet. So far that is the only winter well announced for the Delta.

If Talisman decides to expand its tentative foothold in the Arctic, it could make a major impression on the region.

The Calgary-based company announced Dec. 17 that it plans a capital budget or C$2.2 billion for 2003, up 8 percent from 2002, including C$900 million for domestic activities, mostly hunting for natural gas in Western Canada.

A PNA source said Talisman has also been evaluating Alaska's North Slope for possible investment. As of Dec. 18, the company had not commented on whether or not it had decided to make a move into the state.

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