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Forest Oil looking for Cook Inlet drilling partners Company has six drill-ready prospects other than Cosmopolitan and Redoubt; when Redoubt begins pumping, Alaska share of Forest’s total crude production will be 30 percent Kristen Nelson PNA Editor-in-Chief
Robert Boswell, president and chief executive officer of Forest Oil Corp., said at an IPAA Investment Symposium April 23 that production from the company’s Cook Inlet Redoubt Shoal field, now under development, will change Forest Oil’s production profile and will move Alaska production from 12 percent to 30 percent of the company’s crude oil.
Redoubt Shoal will provide “long-life production” he said: “It will change actually the production profile and our re-investment profile to maintain our production.”
Forest currently has to reinvest about 70 percent of its cash flow to maintain production, Boswell said.
“Going forward we’ll need to only invest about 55 percent to maintain our production, which means we’ll have additional capital available for growth, for debt reduction or for acquisitions.” Not just Redoubt Shoal In addition to Redoubt Shoal, which Boswell said will be on production by the end of 2002, the company has other “ready-to-drill prospects” in Cook Inlet, he said.
The company listed six prospects in addition to Cosmopolitan.
Forest has a 100 percent working interest in four of the prospects, and the company said it plans to explore at 50 percent working interest through farm outs/partnering.
Timing of these prospects is 2003 or 2003-4. Five are offshore and one, a small gas prospect, is onshore near Tyonek. The company estimates that the prospects (Cosmopolitan is included in these numbers) hold 768 million barrels of original oil in place and 582 billion cubic feet of gas. The potential reserves for Forest are 61.3 million barrels of oil and 270 bcf of gas.
Steady production complemented by high risk In North America, Boswell, said, the company’s portfolio has two components: conventional Lower 48 “steady production” from “reasonably predictable resources” and a “a higher-risk impact type of program, predominately north of the 60th parallel and in the deep portions of the Gulf of Mexico.
In Alaska, he said, the company has a large acreage position in Cook Inlet and also in the Susitna and Copper River basins, in addition to a modest position in Prudhoe Bay.
He said the company is in Alaska and Canada because “it’s just like hunting… you go where the game is.”
“The largest remaining exploration potential exists on the continent is just north of the 60th parallel, the vast area that’s been lightly explored and they’ve been some very large discoveries there, not the least of which is Prudhoe Bay.”
He said Forest believes that the Arctic National Wildlife Refuge will someday be opened to exploration, and that Forest is positioning itself for that eventuality. Cook Inlet cost competitive The Cook Inlet offshore is different that the Gulf of Mexico where Forest is active, Boswell said, but “from a cost standpoint the economics are very competitive here, particularly when we compare it to deepwater types of oil projects.”
Forest will spent about $120 million developing Redoubt in 2002, “and barring any regulatory setbacks or permitting setbacks we expect to bring this on production by the end of the year.”
The Osprey platform as 28 slots and 15 will be dedicated to oil producers, with an expected 15,000-20,000 barrels of oil a day. There will be 10 water injectors for pressure maintenance. With an artificial water drive system, Boswell said, Forest expects recovery in the 27-40 percent range and estimates oil in place at 550 million barrels, with recovery of at least 100 million barrels gross, 85 million net to Forest. Gas production from three wells is expected to be 30-50 million cubic feet a day.
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