Benchmark gathering data; waiting on leases

Alan Bailey

Petroleum News

Benchmark Oil and Gas exploration in Alaska’s Kenai Peninsula remains in something of a holding pattern while the company waits for the state to issue the leases that the company bought in the May 2006 Cook Inlet areawide lease sale, Denise Stone, Benchmark’s exploration adviser, told Petroleum News July 25. The company purchased leases in three areas: along the north coast of the Kenai Peninsula, in the central peninsula and north of Kachemak Bay in the southern part of the peninsula.

“At the moment we are waiting on word from the state about the status of our 2006 lease applications,” Stone said. “… I understand they needed extra time to do additional work. … We don’t officially consider ourselves leaseholders yet.”

Meantime the company has been reviewing existing well and seismic data.

“We are in the process of gathering information, looking at wells that have been drilled in the area,” Stone said. “We’re doing an evaluation as much as we can. … We did buy some seismic and are reprocessing it right now.”

Stone said that it’s important to screen the quality of the existing seismic, to decide what data to use.

“It’s the sort of work that’s slow but needs to be done very thoroughly and carefully,” Stone said.

Stone also said that in evaluating the old well data Benchmark is having to recreate the thinking behind exploration done in the 1960s and 1970s, and then build on that early work. For example, an almost exclusive focus on oil rather than gas in early exploration raises questions about possible bypass gas plays in some of the wells.

“It’s not always conclusive that it was a gas productive zone,” Stone said. “… What’s the probability that it would produce?”

Benchmark Oil and Gas started out in 1976 as a privately owned Texas independent. However, the Texas-based company went public as Swedish company Benchmark Oil and Gas AB in 2001. The 2006 Cook Inlet lease purchases marked the company’s first foray into the Alaska oil and gas industry.

Stone said that Benchmark sees the potential to help meet the future gas demand in the Cook Inlet region and definitely wants to find gas, although it’s too early to say whether the company would eventually drill for gas or oil at a particular prospect.

“We’re busy. We’re continuing on with Alaska and we’re very enthusiastic about prospects and the potential in the Cook Inlet,” Stone said.