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Aurora Gas pulls west side inlet rig
Aurora Gas has suspended drilling for the season and released Alaska Well Service rig 1.
The company’s president, Scott Pfoff, said in an Oct. 23 statement that the company had hoped to drill at least two additional development wells in 2006, but released the rig due to geologic risk and commercial uncertainties.
He said the company had mixed results from its 2006 drilling and workover program in Cook Inlet.
The company said in the spring that its oil exploration well, Endeavour 1, at Anchor Point on the Kenai Peninsula was not commercial. AWS rig 1 was then moved to the west side to drill Long Lake 2, a natural gas exploration well, and to do a well workover program. Long Lake 2 was drilled to a measured depth of 3,842 feet and subsequently plugged and abandoned as a dry hole.
The company spent much of the season focused on recompletions and workovers with moderate success on recompletions of the Nicolai Creek 1B, Lone Creek 1, Mobil Moquawkie 1 and Nicolai Creek 9. Results are being evaluated from an acid stimulation of the Three Mile Creek 2.
Commercial uncertainty in mix “This has been a tough year for Aurora Gas,” Pfoff said. “Geologic complexity, the high-cost environment in which Aurora operates and recent commercial uncertainty have all combined in a perfect storm effect to paralyze the company’s efforts to prove up additional reserves and deliverability in Cook Inlet. We understand and accept the geologic risks, and we are constantly striving to reduce costs, but when commercial uncertainty was thrown into the mix, we had no choice but to defer further activities in our core area of operations on the west side of Cook Inlet.”
Pfoff said Aurora Gas tried to exercise its contractual right to suspend deliveries of natural gas to Enstar Natural Gas Co. “at prices that are far below what is economic.” Enstar resisted and is litigating, he said.
“We see no incentive to continue the search for gas until this issue can be resolved; and if the issue is not resolved in Aurora’s favor, the result will be no further exploration and development by Aurora Gas in our core area of operations.”
Focus might shift to oil Pfoff told Petroleum News earlier in October that further drilling this year was at risk because of commercial uncertainty (see story in Oct. 22 issue of Petroleum News).
“There is a certain amount of irony involved; everyone fears the shortage of gas this coming winter, yet Aurora Gas had no choice but to release the rig and suspend further drilling,” Pfoff said Oct. 23.
He said Aurora Gas will continue to explore in Cook Inlet.
“We have other opportunities and prospects that we can pursue.”
Pfoff said the company hopes to conduct additional three-dimensional seismic work this winter “and we are optimistically planning a work program for 2007 including another wildcat exploration well for oil. My guess is that most of the work will either be oil-focused or focused on natural gas opportunities in new areas of Cook Inlet.
—Kristen Nelson
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