Vol. 9, No. 34 Week of August 22, 2004
Providing coverage of Alaska and northern Canada's oil and gas industry

Marathon: 50 years in Alaska - Marathon evaluating gas discovery at Kasilof

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Ninilchik discovery made in 2002, Kenai Kachemak Pipeline begins moving that gas in 2003; 1998 Wolf Lake gas field

Kristen Nelson

Petroleum News Editor-in-Chief

Marathon’s exploration well at Kasilof is a gas discovery, the company’s Alaska business unit manager, John Barnes, said Aug. 13.

The Kasilof well is Marathon’s first dual-lateral well in Alaska, and Barnes said the company also believes it is the first dual-lateral well in Cook Inlet. He said the well “has full integrity on both legs for pressure and fluid control.”

In November Barnes told the Resource Development Council that drilling was under way at Kasilof, a 17,000-foot extended reach well. The well, drilled from onshore between Glam Gulch and Kenai north of the Ninilchik unit, had offshore bottom holes in Marathon’s Kasilof unit.

“That’s probably the most ambitious well we’ve drilled in several years,” Barnes said Nov. 20, adding that the junction had been set and Marathon was drilling the first well from the main bore.

Well under evaluation

Marathon provided few details on the discovery, but Houston-based Marathon spokesman Paul Weeditz told Petroleum News Aug. 18 that the well, the Kasilof South No. 1, was completed in February. “Both legs of the dual lateral encountered natural gas,” he said.

“The results of the well are under evaluation as part of determining economic feasibility of development,” Weeditz said. If development is sanctioned, he said, it will take about five miles of pipe to tie Kasilof into the Kenai Kachemak Pipeline.

Marathon owns its own drilling rig, but Barnes said Aug. 13 that the company used Nabors rig 273 at Kasilof, because there “was only one rig available that could drill that big a well.”

Recent drilling success

Kasilof is the most recent of Marathon’s successful exploration wells.

Marathon has drilled 38 gas wells in the Cook Inlet basin since 1998, including 12 exploration wells. The company said nine of the exploration wells have been successful and three have been suspended pending further evaluation.

That level of drilling activity, Barnes said, reflects a step change, most of which occurred when the company had a truck-mounted rig, Glacier Rig No. 1, built for drilling on the peninsula.

In the late 1990s, prior to the arrival of the Glacier rig, he said, a couple of wells a year was about the norm.

The Glacier rig began work in early 2000, and Barnes said that aside from Christmas holiday shutdowns and maintenance, the rig has worked pretty much non-stop, “drilling wells primarily, a couple of re-drills” and rehabilitating some old wells.

Over this last winter, Barnes, said, drilling activity spiked, with three rigs working, two Nabors rigs in addition to the Glacier rig.

The expectation over the next year is for “relatively constant drilling,” he said. There would be a possibility Marathon would use a second rig, depending on drilling opportunities.

Ninilchik unit and KKPL

The Marathon-Unocal discovery at Ninilchik was announced in early 2002, with the discovery well on the 25,000-acre Ninilchik prospect testing gas at restricted flow rates of up to 11.2 million cubic feet per day. Marathon, operator at Ninilchik, holds a 60 percent working interest ownership in the prospect.

Drilling so far has been at either end of the formation, he said, with three-dimensional seismic over the center of the structure being evaluated. “Based on that seismic we’ll drill the central portion of the structure,” he said. Ninilchik, like Kasilof, is an offshore formation drilled from onshore.

There are four drilling locations now, and there will probably be one or possibly two more locations to fully delineate the field, Barnes said, “and then an ongoing drilling and development program there after it’s fully delineated.”

Seven wells have been drilled at Ninilchik, Barnes said, with probably at least 10 more wells to be drilled.

To tie Ninilchik gas into the Kenai Peninsula gas pipeline system, Marathon and Unocal formed Kenai Kachemak Pipeline LLC, and built a pipeline running from Ninilchik to the nearest tie-in point. Gas began moving through that line Sept. 2, 2003, Barnes said. “The Kenai Kachemak Pipeline is the first new gas transmission line … in the Cook Inlet … in well over a decade,” he noted.

Wolf Lake

In 1998, Marathon announced its Wolf Lake gas field discovery, Barnes said, discovering gas in an area that had previously been explored for oil.

Wolf Lake, in the Kenai National Wildlife Refuge some 12 miles northeast of Soldotna, came on line in November 2001, via a five-mile pipeline, “the first Cook Inlet gas field discovery to be brought to market since 1979,” Barnes said when production was announced. “The Wolf Lake discovery is a direct result of Marathon’s commitment to a multi-year drilling effort in the Cook Inlet,” he said, noting that Marathon has viewed “Cook Inlet as an area with a proven resource base, waiting on the right market conditions to support development.”

Marathon has also, Barnes said, completed an environmental impact statement for its East Swanson prospect on the wildlife refuge, “only the second EIS that has been approved for development on the refuge; the first was our Wolf Lake project.”

And, Barnes said, Marathon has “exploration prospects at Swanson River and around the town of Sterling where we shot an onshore seismic survey last year,” as well as other leads the company is working in the geologic and geophysical areas.

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