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GeoPetro going for Frontier Spirit Company provides more information about its drilling plans near Point MacKenzie; expects to spud in second quarter 2009 Alan Bailey Petroleum News
In an Aug. 27 press release GeoPetro published more information about its planned drilling for natural gas near Point MacKenzie, across the Knik Arm from Anchorage, on the northeast side of Alaska’s Cook Inlet. In filings with the U.S. Securities and Exchange Commission the company had already outlined a $5 million exploration venture targeting what it termed the Midnight Sun prospect.
In its new announcement the company says that it plans to drill what it now calls the Frontier Spirit well to test for conventional gas in the middle and lower Tyonek formations at a depth of about 8,000 feet in an 11,500-acre structure. The company says that the Hemlock formation, “a known oil and gas producer in the Cook Inlet,” will be a secondary drilling objective.
Given the operational difficulties of drilling in the winter, drilling is likely to start in May 2009, the company said.
“Prior to this time frame, highly variable road and weather conditions can result in significant drilling cost overruns due to freezing rig components and technical difficulties associated with winter drilling operations,” the company said. “GeoPetro anticipates that seasonal road restrictions and highway load limits associated with springtime ground thaw conditions in Alaska will be lifted by late April or early May and the drill rig can then be moved onto location.”
The company said that it has identified a drilling rig, completed the initial permitting and secured bonding. Well pad and access road construction should be completed in the fall, before the ground freezes up. The company is continuing with permitting, doing procurement and evaluating proposals from drilling and service vendors.
Sizeable target By reprocessing 2-D seismic data “acquired from both Amoco and Shell,” GeoPetro says that it has identified a “sizeable initial reserves target.” The potential Tyonek reservoir likely consists of river-lain sandstones and river fan deposits, with abundant, deeper coals providing a potential source of gas. And, intriguingly, the seismic data have revealed what is known as a direct hydrocarbon indicator — a seismic feature that suggests the presence of hydrocarbons, especially natural gas, in the subsurface.
The Frontier Spirit well will be located less than two miles from an Enstar 20-inch gas pipeline “which has abundant spare capacity,” GeoPetro said.
GeoPetro entered Alaska in April 2005 when it bought out the state acreage of Pioneer Oil Co. in the Cook Inlet area. Later the company added to these 117,000 acres by purchasing leases on 5,000 acres of Alaska Mental Health Trust Authority land at Point MacKenzie.
Under terms of GeoPetro’s acquisition of the Pioneer Oil acreage, the company was obligated to conduct a $2.5 million work program, including drilling at least two test wells on the property by Nov. 1, 2008, to retain the leases. The purchase option also called for GeoPetro to make a final payment of $1.07 million, or $10 an acre, for the leases after evaluating the drilling results.
But GeoPetro now says that the $2.5 million work commitment “has been waived in its entirety” and that the final payment for the leases has been tendered.
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