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Vol. 15, No. 24 Week of June 13, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Looking for oil at North Fork

In an intriguing twist to Armstrong Cook Inlet’s plans to develop the North Fork gas field in Alaska’s southern Kenai Peninsula, the company has filed an oil discharge prevention and contingency plan for approval by the Alaska Department of Environmental Conservation. An approved contingency plan of this type is only required for a drilling operation that may encounter oil, rather than just natural gas, thus suggesting that Armstrong is seeking oil in the North Fork unit.

And in a plan of operations filed with the state in 2008, Armstrong said that it would apply for an oil discharge prevention and contingency plan if it decided to drill for oil at North Fork.

Armstrong has declined to make any public comment on any intentions to carry out oil exploration at North Fork, but the opening sentences of the contingency plan’s description of the company’s North Fork operations clearly indicate that the company is seeking more than natural gas.

“Armstrong Cook Inlet LLC … will be conducting oil and/or gas drilling and production operations onshore in the eastern side of Cook Inlet in Southcentral Alaska within and adjacent to the North Fork unit,” the plan says. “This plan is primarily intended to cover the oil drilling operations and it may be modified at a later date to include oil production operations.”

Armstrong would probably use Marathon’s Glacier No. 1 rig to drill the oil well, the plan says.

Gas wells and pipeline

Under the terms of a gas supply agreement with gas utility Enstar Natural Gas Co., Armstrong has agreed to drill two new North Fork gas wells, as well as build a gas pipeline from North Fork to connect with a new Enstar gas line at Anchor Point on the Kenai Peninsula coast. And the North Fork plan of development, filed with Alaska’s Division of Oil and Gas in December, confirms a plan to drill those wells and to build the pipeline, as well as to shoot some 3-D seismic in the unit and possibly re-enter the two existing North Fork gas wells.

Pipeline construction and as much as possible of the other work would occur in 2010, the plan says.

The plan of development says that the new wells will penetrate the Tertiary Tyonek formation, the formation known to contain the sands that reservoir the North Fork gas resources.

But there’s no mention in the plan of any intention to look for oil — oil does occur in the Tyonek of the Cook Inlet basin, although it is commonly found in one of the formations that is lower down in the Tertiary rock sequence.

Not surprising

Temple Davidson, the Division of Oil and Gas unit manager for the North Fork unit, told Petroleum News June 9 that Armstrong has not filed an amendment to its North Fork unit plan of development to specify an intent to drill for oil. But that is not surprising — Armstrong would likely seek assurance of an approved oil discharge prevention and contingency plan before filing a plan of development amendment, Davidson said.

—Alan Bailey



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