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CIE expects progress on two fronts Cook Inlet Energy ready to drill first grass roots well at North Fork and near closing on North Slope Badami Savant acquisition Eric Lidji For Petroleum News
Cook Inlet Energy LLC expects to reach two milestones by the end of the year: drilling its first well at the North Fork unit and closing on its acquisition of Savant Alaska LLC.
On Nov. 14, the local subsidiary of Tennessee-based Miller Energy Resources Inc. received a permit from the Alaska Oil and Gas Conservation Commission to drill the North Fork Unit No. 24-26 well at the onshore field in the southern Kenai Peninsula.
Since buying North Fork from previous operator Armstrong Cook Inlet LLC earlier this year, Cook Inlet Energy acquired Rig-37 for dedicated use at the field and increased production some 35 percent, Chief Operation Officer David Hall said during a presentation at the Resource Development Council’s annual conference on Nov. 19.
The increase came from boosting production at choked-back wells. But Cook Inlet Energy is now planning a campaign of grass-roots wells at the North Fork field.
The NFU No. 24-26 well would be a directional well starting at the existing North Fork Unit pad and ending at a bottom hole location to the southwest to “recover gas reserves that are not accessible to existing development wells,” according to the AOGCC.
Cook Inlet Energy is also in the process of permitting the NFU No. 42-35 well, which would start at the existing pad and continue farther to the south than NFU No. 24-26.
The North Fork unit is currently home to six wells, the earliest dating back to the 1960s and the remainder coming since Armstrong acquired the field in the past decade.
Cook Inlet Energy intends to drill as many as 24 wells from 29 potential locations to fully develop the field over an undefined period of time. At $5 million per well, the program would be expensive. But North Fork gas production is currently under contract with Enstar Natural Gas Co. at a price of $7.05 per thousand cubic feet. Cook Inlet Energy expects to add some $20 million in annual revenues from the field in the short term.
Quick work at Badami The acquisition of Savant should close “in a few weeks,” according to Hall.
With the acquisition, Cook Inlet Energy would - through a subsidiary - operate the Badami unit, an eastern North Slope oil field producing some 1,100 barrels per day,
As it did with its initial Cook Inlet fields, Cook Inlet Energy intends to develop Badami through a combination of working over existing wells and drilling new wells. The current budget calls for two wells - either sidetracks or grass roots wells - in the next year.
But Cook Inlet Energy also sees Badami as an entry point to the basin. “We’re excited about that acquisition,” Hall said. “I think it gives us a good launch pad for the North Slope. We’ve been eying that field for a while and think there’s lots of room for growth within the Badami field and also, too, some of the exploration acreage that comes along with the acquisition.” That exploration acreage includes leases south of the ExxonMobil-operated Point Thomson unit, in which Cook Inlet Energy is a working interest owner.
Those activities come on top of continuing work at the West McArthur River unit and the Redoubt unit, the two fields Cook Inlet Energy operates on the west side of the basin. The company also holds leases and exploration licenses in the Susitna and Iniskin basins.
Cook Inlet Energy is currently producing some 3,070 net barrels of oil equivalent per day, with another 600 net barrels per day pending with the Savant sale, according to Hall.
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