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THE INDEPENDENTS 2003: Aurora tastes inlet success Gas producer tallies 2003 results, ponders new exploration in 2004 Steve Sutherlin Petroleum News
Aurora Gas LLC spent $15 million in 2003 to drill wells, shoot seismic and add production facilities, shoring up its position as a Cook Inlet gas producer and operator, G. Scott Pfoff, its president, told Petroleum News in October. Pfoff is also president of another of the three Aurora companies, Aurora Power Resources Inc., a commercial gas seller in Southcentral Alaska.
Late this winter, the company expects to have a handle on its 2003 results, and once those results are in, Aurora will set a budget for the 2004 season, Pfoff said.
The company is analyzing two exploratory projects for 2004, one of which the company opted not to name at Independents’ press time, and another, which holds great promise — the Long Lake prospect, Pfoff said. Long Lake is a re-entry that Aurora hopes will show large quantities of gas. If the re-entry proves successful, the company will proceed with development in 2004.
Texaco drilled the Long Lake Unit 1 well in 1973 to a measured depth of 11,097 feet and a total vertical depth of 11,065 feet from a surface location in section 32, township 12 north range 12 west, Seward Meridian.
“We’re very optimistic about the Long Lake prospect,” Pfoff said.
Counting 2003 successes Aurora already knows it has one solid success from its 2003 program. On Aug. 1 it started production from the Lone Creek field on the west side of Cook Inlet, which is delivering 5 million cubic feet per day to Enstar, and has the capability to go higher as demand warrants, the company said. The field adds an approximate six-fold increase over the 1 million cubic feet of gas per day Aurora produces in Cook Inlet from its Nicolai Creek field. Gas from Lone Creek reaches a newly constructed interconnect with Marathon’s 16-inch Beluga pipeline via six miles of six-inch gathering line Aurora completed this year.
Aurora owns 100 percent working interest and is operator of Lone Creek. The company has a contract to supply Enstar approximately 13 billion cubic feet of gas over the life of the field and said it believes reserves can meet that requirement and allow sales of gas to other markets.
The company experienced a temporary setback at its Nicolai Creek field. A new well, the Nicolai Creek No. 8, was spudded in 2003, but unfortunately a large boulder halted drilling progress, and the well had to be relocated. The replacement well was re-designated Nicolai Creek No. 9, the company said. No. 9 went smoothly, and following completion of gathering lines and surface production facilities, Aurora expects to start production from it and the No. 2 and No. 1B wells in mid-November. The three wells share a common compressor that is sized for production of 11 million cubic feet per day, the company said.
Aurora said it has also undertaken a workover of the Mobil Moquawkie No. 1, which was completed as a gas well in 1965. The well had measured and true vertical depths of 11,364 feet and was drilled from section 1-T11N-R12W, SM. It was plugged and abandoned in 1970. If the results warrant, the company said it would construct pipelines and production facilities there.
Aurora isn’t trying for monster gas fields, but instead is focusing on a less risky plan of re-entering wells that were drilled and then abandoned, primarily by larger companies looking for oil.
“These are not going to be huge fields,” Pfoff told Petroleum News in 2002, “but for a company our size, we can make the economics work, going back in, essentially targeting missed pay, or pay that was identified and never really tested because of lack of a gas market, lack of economics at the time.”
Aurora conducted a 28 square mile 3-D seismic program last winter and is using the data to prioritize its projects, Andrew Clifford, Aurora’s executive vice president of exploration told Petroleum News in August. Veritas DGC Inc. was the seismic contractor, the company said.
Reaching goals From day one Aurora has had its sights on becoming a producer and an operator in Cook Inlet, Pfoff told Petroleum News in 2001.
In 1997, Aurora Power was a successful bidder in Cook Inlet lease sales on 8,000 acres on the Kenai Peninsula, and in 1998 the company acquired Chevron’s working interest in the Marathon-operated Kenai and Cannery Loop gas fields.
Aurora's first Cook Inlet production was at the Nicolai Creek field on the west side, beginning in early October 2001.
In 2002, Aurora went out for financing and partnered with Kaiser Francis Oil, which agreed to fund Aurora Gas up to $25 million to acquire, explore and produce properties Aurora had identified.
On Oct. 3, 2002, Aurora Gas closed a transaction with ConocoPhillips Alaska Inc. to acquire a 50 percent working interest and leasehold at Moquawkie on the west side of the inlet.
On Oct. 18, 2002, Aurora Gas said it had reached an agreement with Anadarko Petroleum Corp. to acquire Anadarko’s entire Cook Inlet oil and gas lease holdings, which included the remaining 50 percent at Moquawkie and approximately 40,000 acres on the Kenai Peninsula. That deal closed in January.
Aurora acquired an additional 3,000 acres in 2003 at an Alaska Mental Health Trust sale. Aurora Gas’ Cook Inlet stake has grown from 8,000 acres of oil and gas leases to 108,000 acres, including state, Alaska Mental Health Trust and private acreage.
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