Aurora Gas LLC has been operating in Cook Inlet longer than any other independent, and no company smaller than Aurora operates more production in the Cook Inlet region.
The utility Aurora Power Resources Inc. created Aurora Gas in 2000 as an exploration and production arm. The local independent operates five producing natural gas fields on the west side of Cook Inlet - Nicolai Creek, Lone Creek, Moquawkie, Albert Kaloa and Three Mile Creek - as well as several exploration prospects throughout the region.
Today, the Kaiser-Francis Oil Co. affiliate Aurora-KF LLC owns a 95 percent interest in Aurora Gas. Aurora Power Resources owns 4 percent and Orion Resources Inc. owns 1 percent, according to the Division of Corporations, Business, and Professional Licensing.
As the smallest independent company operating in the region, Aurora has regularly faced opportunities and challenges uncommon to many of the larger players in Cook Inlet.
Over the past 15 years, the company has revived production at many smaller natural gas fields that had either been ignored or abandoned by larger players in the region. In many ways, Aurora created an operating model that was repeated by many other companies as small independent explorers rushed into the Cook Inlet region at the end of the 2000s.
As a small player, Aurora has regularly faced regulatory and economic challenges.
The company shut-in its Nicolai Creek unit in 2005 while it sought a commercial arrangement to use the Cook Inlet Gas Gathering System and suspended drilling operations across all its Cook Inlet properties in parts of 2006 and 2007 while it settled a contract dispute with Enstar Natural Gas Co. that rippled all the way to Fairbanks.
The Nicolai Creek unit
Texaco Inc. discovered a natural gas pool at the Nicolai Creek field in 1966 with the Nicolai Creek State No. 1A well and another in 1967 with Nicolai Creek Unit No. 3.
Although the wells initially produced more than 1 million cubic feet per day, according to state files, production declined quickly in later years and the field was shut-in in 1977.
Aurora acquired the Nicolai Creek unit in 2000 through a trade with Marathon Oil Co., giving up a working interest at Kenai and Cannery Loop in return for operatorship. The company restarted production in late 2001, after cleaning out a well killed by drilling mud. In subsequent years, Aurora also restarted the Nicolai Creek No. 1B and No. 2 wells and drilled Nicolai Creek No. 8, which is now known as Nicolai Creek No. 9.
After having to suspend production for parts of 2005, 2006 and 2007 because of commercial disputes involving marketing its product, Aurora brought the Nicolai Creek No. 11 well online in late 2009 and drilled the Nicolai Creek No. 10 well in 2011.
The results of those wells prompted Aurora to drill the Nicolai Creek No. 13 and No. 14 wells in August and July 2013, respectively. Based on the previous wells, the company had expected those two wells to yield an average production bump of 3 million cubic feet per day, according to Aurora Gas President Ed Jones, but “neither of the development wells resulted in commercially viable accumulations of hydrocarbons and were plugged and abandoned,” according to a plan of development for the year ending in October 2014.
In its 2015 plan of development, Aurora proposed drilling a Nicolai Creek No. 12 well to gather more information about deeper sands encountered in the No. 10 well but Alaska Oil and Gas Conservation Commission records through September show no permit for the well. The company has also been considering a storage program at Nicolai Creek.
Through July 2015, the unit had produced some 8.8 billion cubic feet of natural gas.
The Lone Creek and Moquawkie units
Cook Inlet Region Inc. administers the Lone Creek and Moquawkie units, which are adjacent on the west side of Cook Inlet, in an inland area south of the Beluga River unit.
Socony Mobil Oil Company Inc. discovered the Moquawkie field in 1965 while looking for oil and completed the Moquawkie No. 1 discovery well as a gas producer about 1967. Production declined precipitously after two years and more gradually over eight years until the field was shut-in in 1978, according to the Division of Oil and Gas.
Various other companies pursued the field over the following two decades, when Anadarko Petroleum Corp. and ARCO Alaska Inc. began exploring in the vicinity.
Aurora acquired the field from Anadarko as part of its initial acquisition of Cook Inlet properties in 2000. The company recompleted the Moquawkie well in 2003 and brought the field online around July 2004 at 5 million cubic feet per day. The company subsequently returned the Moquawkie No. 2 well to production. In 2005, Aurora offset the discovery well with Moquawkie No. 3, which came online that summer at nearly 4 million cubic feet per day. In 2006, Aurora recompleted the discovery well.
Aurora drilled the Moquawkie No. 4 well in 2008. The well encountered a shallow gas pocket but the blowout was controlled within 24 hours. Plans for a Moquawkie No. 5 well were deferred until natural gas prices increased and ultimately cancelled altogether.
Through July 2015, the Moquawkie unit had produced more than 5 billion cubic feet.
Anadarko and ARCO Alaska discovered the Lone Creek field in the late 1990s with the Lone Creek No. 1 discovery well and the Lone Creek No. 2 delineation well.
Aurora brought the field online in summer 2003, producing 5 million cubic feet per day from the original discovery well, and drilled the Lone Creek No. 3 offset well in 2005. The following year, Aurora recompleted the original Lone Creek No. 1. After its contract dispute, the company returned to the field in 2009 to drill the Lone Creek No. 4 well.
Gas production from Lone Creek rose and fell year by year, gradually trending downward over the first decade of operations. Aurora briefly took the field offline around 2013 and returned it to production a year later, according to the Division of Oil and Gas.
Through July 2015, the Lone Creek unit had produced more than 10.8 billion cubic feet.
The Albert Kaloa field
Pan American Petroleum Co. discovered the Albert Kaloa gas field on the west side of Cook Inlet in 1967 while searching for oil and brought the Albert Kaloa No. 1 discovery well online in 1970. The company suspended operations after sand and mud plugged the well. When Aurora acquired the prospect, the company inherited the Albert Kaloa No. 1 well and the Simpco Kaloa No. 1 well drilled in 1978 and suspended later that year.
With those two plugged and abandoned wells unable to be salvaged, Aurora drilled the Kaloa No. 2 well in 2004. The well duplicated the target of the original Kaloa No. 1 well but utilized improved sand controlling technology to avoid the original problems. The well “perforated and tested four separate intervals at a combined flow rate of approximately 10 million cubic feet per day,” according to the company. Aurora returned the field to production toward the end of summer and began planning two more wells. Unfortunately, the Kaloa No. 4 well in 2005 and the Kaloa No. 3 well in 2009 were both dry holes. “The geology is starting to get to us,” President Scott Pfoff told Petroleum News in 2009, after the second dry hole. “But we’re not ready to throw in the towel yet.”
Albert Kaloa is between the Nicolai Creek and Moquawkie units.
Through July 2015, Albert Kaloa had produced more than 3.6 billion cubic feet.
The Three Mile Creek unit
The state formed the Three Mile Creek unit in 2004 over some 9,200 acres of state of Alaska, Alaska Mental Health Trust and Cook Inlet Region Inc. leases. The unit agreement required Aurora and partner Forest Oil to drill two wells and shoot seismic.
The region had previously hosted some exploration activity. Superior Oil Co. drilled the 13,773-foot Three-Mile Creek State No. 1 well in the summer of 1967 and Phillips Petroleum drilled the 6,063-foot North Tyonek State No. 1 nearby the summer of 1973.
Despite those previous wells, Aurora President Scott Pfoff told Petroleum News at the time that its well was “going to be much closer to what I would call a wildcat well than a simple developmental reentry.” In late 2004, Aurora drilled the Three Mile Creek No. 1 well and brought the field online in August 2005. The company drilled the Three Mile Creek No. 2 well in November 2005 and deferred plans for a third Three Mile Creek well. As part of a major recompletion campaign across its properties, Aurora performed an acid stimulation of the Three Mile Creek No. 2 in 2006. The company recompleted Three Mile Creek No. 2 in 2008 to perforate additional zones and hydraulically fractured the well in 2010 to improve production from the thin layers of productive sands.
When Forest Oil sold its Alaska assets in 2007, Pacific Energy Resources Ltd. took over the minority interest at Three Mile Creek. Pacific Energy sold the interest to Miller Energy Resources-subsidiary Cook Inlet Energy in late 2009, in a bankruptcy auction.
Through July 2015, Three Mile Creek had produced more than 2.5 billion cubic feet.
