Vol. 24, No.8 Week of February 24, 2019
Providing coverage of Alaska and northern Canada's oil and gas industry

Oil patch insider: Jade gets Sourdough approval; Looking for the Spartan 151; Elixir loans on fed leases

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Kay Cashman

Petroleum News

Per a Feb. 20 email from Erik Opstad, member-manager of Jade Energy LLC, the Point Thomson unit owners have received approval from the Alaska Department of Natural Resources’ Division of Oil and Gas for Jade’s plans to drill a new well in the first quarter of 2020 on ADL 343112 in area F of the unit, The lease, the most southeasterly in Point Thomson and adjacent to the western border of the ANWR 1002 area, holds two mid-1990’s Sourdough oil discovery wells. Jade is part owner of the lease, per a farm-out agreement with unit operator ExxonMobil and the other working interest owners,

The two-year Point Thomson Unit 2018 Area F Plan of Development submitted Dec. 21 to the division by Jade did not meet the requirements set forth in regulation, so Jade filed a revised plan and was notified Feb. 20 that it has been approved.


Looking for the Spartan 151?

Spartan Offshore Drilling had the only working jack-up rig in Alaska moved from Seward Harbor to ASRC Energy Services Rig Tenders Dock in Kenai. The new location has the Spartan 151 positioned closer to potential upcoming work in Cook Inlet.

As reported by Petroleum News in the last few months, several companies have expressed interest in hiring the rig.

The most likely job for 2019 is to conduct development operations for Furie Operating Alaska, including the addition of new perforations in the Kitchen Lights unit KLU No. A-2A and KLU No. 3 wells, according to an Alaska Division of Oil and Gas drilling plan approval, issued Dec. 11. Furie is also evaluating a fifth development well drilled from a jack-up rig cantilevered over its Julius R offshore production platform.

That said, it is not known how Furie’s recent problems with gas production will impact its plans (see related story in this issue), although it is likely they will simply delay rig mobilization by a couple of months.

Hilcorp Alaska plans to use a jack-up rig to plug and abandon the discovery well in the North Cook Inlet unit, along with a previously drilled exploration well, according to an application the company filed with the National Marine Fisheries Service for an incidental take authorization. The work is expected to take 60-90 days in May through July of 2020.

Also in 2020, Hilcorp “plans to possibly drill two and as many as four exploratory wells,” pending results of a 3-D seismic survey over its lower Cook Inlet outer continental shelf leases, the company said. The entire program would take an estimated 80-240 days, depending on the well count and drilling depths.

Glacier Oil & Gas Corp. is continuing to seek partners to drill an offshore exploration well at its Sabre prospect, the company said in its most recent development plan filed with the division. The company is continuing its permitting activities for the proposed well, located in an offshore corner of the company’s West McArthur River unit. Glacier’s plans call for the use of the Spartan 151.

BlueCrest Alaska Operating has considered the use of a jack-up rig to drill various shallow or distant oil and gas targets around its offshore Cosmopolitan unit in Cook Inlet near Anchor Point.

BlueCrest is currently producing oil from an on-shore pad, from which the company uses its custom-built BlueCrest Rig No. 1 to drill directional wells and laterals to offshore targets.

In an early 2016 application to the U.S. Fish and Wildlife Service, BlueCrest described a three-well offshore and onshore exploration program, but it withdrew the application in July of the same year.

Jack-up wanted

Not long ago, there was no jack-up rig available in Alaska.

The Spartan 151 first arrived in Cook Inlet in 2011, through the efforts of Danny Davis, founder of the Escopeta group of companies. It was the first jack-up rig to work in Cook Inlet in 16 years, following years of effort by Davis and others to attract the needed investment.

The rig’s trip to Alaska was a struggle in itself.

Davis hired a purpose-built self-propelled heavy lift vessel for the notoriously treacherous voyage around the southern tip of South America from the Gulf of Mexico to the Pacific Ocean. The rig was delivered to Nanaimo, on the east coast of Vancouver Island, Canada, where the rig was floated off the transport ship for testing and repair of the legs and jacking systems that Escopeta suspected might have been damaged in pounding storms encountered on the first attempt to round Cape Horn.

Following repairs, three tug boats powered the rig on its journey from Canada to Cook Inlet.


Elixir loans Entek funds for fed leases

Elixir Petroleum, parent of its Alaska operating entity Emerald House, has decided to lend the recent buyer of its Alaska assets, Entek Energy, the $500,000 Entek has to pay the U.S. Bureau of Land Management for 10 federal leases Elixir was high bidder on in the Dec. 12 National Petroleum Reserve-Alaska lease sale.

Entek is expected to close in March on the three leases it is buying from Elixir that were originally acquired from oil and gas investor and independent Paul Craig in mid-November. The prospect was called South Nanushuk by Craig but has been renamed Project Peregrine.

The 13 leases are connected in a block south of Armstrong’s Nanushuk discoveries at Pikka and Horseshoe and south of ConocoPhillips’ Willow oil find, all west of the central North Slope.

On Feb. 11, Elixir received formal lease documentation from BLM for the 10 leases that it is transferring to Entek, requiring payment of the balance of the lease bid price by Feb. 26.

Both Elixir and Entek are Australia-based independents.


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