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Vol. 15, No. 46 Week of November 14, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

The Explorers 2010: Escopeta Oil

Escopeta came by the largest unit in the Cook Inlet basin the hard way. The Houston-based independent first took interest in Alaska in the early 1990s and began accumulating Cook Inlet leases by the end of the decade. In 2003, the company began focusing on the Kitchen and East Kitchen prospects, but couldn’t line up the pieces needed for a drilling program in shallow, sub-Arctic waters. Those challenges have continued in the seven years since. The state merged Kitchen with two other offshore units in 2009, making Escopeta the operator of the 83,394-acre Kitchen Lights unit. The state recently put the unit in default, but also gave Escopeta more time to finally bring a jack-up rig to Cook Inlet. Escopeta recently appealed the default decision. Making the task somewhat easier, though, is a significant new tax credit that will defray the cost of the first three Cook Inlet wells drilled by a jack-up rig. Success for Escopeta at Kitchen Lights could temper declining natural gas production in the Cook Inlet, but failure could mean the end of the company in Alaska; Escopeta recently relinquished its North Alexander prospect.

Current exploration focus:

Cook Inlet: Escopeta needs to have a jack-up rig on a ship bound for Alaska by February 2011 and start drilling a well by September 2011, or risk losing the Kitchen Lights unit.



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