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Vol. 12, No. 26 Week of July 01, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

Looks like a gas discovery

Rutter and Wilbanks getting ‘some real good gas flows’ from Glennallen sidetrack

Kay Cashman

Petroleum News

Rutter and Wilbanks Corp. executives think they have a gas discovery at a sidetrack they began drilling about 10 days ago in Alaska’s undeveloped Copper River basin.

“It looks like we have a gas discovery in the upper Nelchina, which was our main objective. We’re getting some real good gas flows,” Bill Rutter III told Petroleum News June 28. His father Bill Rutter Jr. is on-site at the well, which is about 12 miles west of Glennallen and 180 miles north and east of Anchorage. “We’re going ahead and drilling to the second objective, the lower Nelchina, before we set pipe, complete the well … and bring in testing equipment, so it’s a little premature, but we’re encouraged. … We won’t be able to test for rates and draw down until we come back with a perfing gun, probably a wireline-operated perfing gun, and testing apparatus, but it’s the first good news we’ve had in a couple of years.”

Well depth was about 4,350 feet on the morning of the 28th, he said, with another 50 feet or so to get to the lower Nelchina.

Results in two weeks

Rutter expects to have testing results in about two weeks.

Two weeks isn’t long, considering the Midland, Texas-based independent spud the main well, the Ahtna 1-19, two and a half years ago, followed by the recent sidetrack, Ahtna 1-19A. If their patience pays off, Ahtna 1-19A will be the area’s first commercial natural gas discovery, which is good news to the people of Glennallen, who currently have no access to natural gas.

Rutter and Wilbanks started drilling the Ahtna No. 1-19, the company’s first well in Alaska, in February 2005. But drilling was hampered when the drill bit encountered extremely high pressures in the well bore. To alleviate the pressure drillers had to use heavy mud to complete drilling, which damaged the formation.

“We had … skin, formation damage,” Bill Rutter III said in 2006 before going back into the well a second time. “We ended up drilling most of that well with 20 pound mud. Many would say that was impossible, but it wasn’t impossible, just expensive.”

Rutter Jr. said he was fairly certain the Ahtna No. 1-19 was one of the most expensive onshore gas wells ever drilled in Alaska.

“This is a risky deal, but we have a long history of taking risks. We have been wildcatters for three generations and see no reason to stop now. We have a shot at some really big reserves on this deal,” Rutter Jr. told Petroleum News in 2005.

In 2006 the company went back into the main well, which was about 7,500 feet deep, hoping to get through the casing with some specialty equipment to where the Rutters thought the reservoir was, some 10-12 feet past the reservoir damage. “But the drill didn’t work. … They got stuck again. They couldn’t get more than 3 or 4 feet out into the formation,” Rutter III said in late 2006. “It was an expensive experiment and it didn’t work.”

“We could never see what was in the reservoir because … of the weight of the mud,” he said.

In his recent interview with Petroleum News, Rutter III said, “It’s tough to keep going in the face of high expenses and no results, but you can’t fold out of the game because the pot’s too big and you may have the winning hand.”

Ahtna Inc. holds interest

The Ahtna well and sidetrack were drilled on Native land in the Ahtna region, Rutter III said. A group of local Native corporations, including Ahtna Inc., are leaseholders with a three-sixteenth overriding royalty interest. “A gas discovery would be good for economy; mean lower energy bills for the people,” he said.

Rutter and Wilbanks’ gas would be sold first for local use, including the area’s electric cooperative, which currently burns diesel. If there’s enough gas, it could be taken south to the Anchorage area, he said.

The Rutters have said all along that they wanted a major gas discovery that would “stimulate the North Slope spur line concept” and convince the state to first build a section of the line from Glennallen to Palmer, just north of Anchorage, to get Copper River gas into the Anchorage-based Enstar system for Southcentral Alaska. “That could eventually lead to a spur line north to tap into a North Slope gas pipeline,” Rutter III said in 2005.

Rutter and Wilbanks’ well and sidetrack were the first wells in the Copper River basin since Copper Valley Machine Works drilled the Alicia No. 1 well in 1983.

Initially Rutter and Wilbanks used a rotary drilling rig, but switched to a Schlumberger coiled tubing unit.

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