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Armstrong permitting North Fork wells Area independent asking AOGCC for spacing exemptions on two proposed gas development wells in the South Kenai Peninsula unit Eric Lidji For Petroleum News
Armstrong Cook Inlet is proposing to drill two new development wells on the southern Kenai Peninsula, according to the Alaska Oil and Gas Conservation Commission.
The local subsidiary of Denver-based Armstrong Oil and Gas is permitting two gas development wells at the North Fork unit, located 10 miles north of the city of Homer.
Armstrong is asking the AOGCC for an exemption to spacing guidelines that require wells producing from the same interval to be set more than 3,000 feet apart.
The proposed wells would be located near North Fork Unit No. 34-26, which Armstrong drilled in the summer of 2008 to around 9,000 feet. That well delineated the Tyonek sands originally proven productive more than 40 years ago by Standard Oil of California.
The proposed wells — NFU No. 14-25 and NFU No. 32-35 — would start near or at the existing well pad, but branch out in different directions, one east and one south.
North Fork is a relatively small unit, making spacing exemptions almost inevitable for multiple wells. Armstrong previously received an AOGCC spacing exemption in 2008 to drill NFU No. 34-26 well just outside the boundaries of the existing North Fork unit.
In its application to the AOGCC, Armstrong described both NFU No. 14-25 and NFU No. 32-35 as “gas development wells.” However, the company recently filed an oil discharge prevention and contingency plan with the Alaska Department of Environmental Conservation, a document only required for drilling that might encounter oil (regardless of whether or not the company plans to ultimately develop that oil). So far, Armstrong has not added any oil exploration activities to its development plans filed with the state.
Plans for more drilling? Armstrong previously suggested it hoped to drill new wells into the Tyonek formation this year, but said any progress depended on timing. The company contracted a seismic survey this year and is working on a pipeline to market existing North Fork supplies.
Armstrong plans to finish that pipeline this year.
In late May, the state issued a right-of-way lease for the Armstrong subsidiary Anchor Point Energy to build the North Fork Pipeline. However, even once that line is built and operational, Armstrong won’t be able to deliver North Fork gas to the Southcentral grid until Enstar completes the Anchor Point Pipeline coming off the Happy Valley Extension of the Kenai Kachemak Pipeline in Ninilchik. That line is still awaiting key permits.
Under the terms of a supply contract between Armstrong and Enstar approved last November, Armstrong agreed to drill two additional gas wells at North Fork. If reserves ultimately prove large enough, North Fork may someday supply Homer with natural gas.
Armstrong previously mentioned the possibility of testing additional sands in the two existing wells at the unit, NFU No. 34-26 and the legacy well NFU No. 41-35, this year.
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