Pelican Hill to drill Trading Bay lease in farm-in agreement

Kristen Nelson, Petroleum News editor-in-chief

Al Gross of Pelican Hill Oil & Gas Inc. and Paul Craig of Trading Bay Oil & Gas LLC said Aug. 28 that they have reached a farm-in agreement involving the North Beluga River prospect.

They said Pelican Hill has committed to drill a gas well on Trading Bay’s lease by the end of 2003.

The prospect is an Alaska state oil and gas lease, ADL 0389933, that Craig acquired in the state's 2001 Cook Inlet areawide oil and gas lease sale. Craig told Petroleum News Sept. 3 that he first acquired the lease, some 1,160 acres on the northwest boundary of the Beluga gas field, in 1993. He sold his interest in the lease, but it was never developed, and he reacquired it when it became available again.

The Burglin X33-12 well was drilled on the lease in the 1970s, Craig said. "They logged it, but didn't test it." State records show that well was drilled by Alaska Energy Development to a measured depth of 6,730 feet and a true vertical depth of 6,694 feet. It was plugged and abandoned in January 1977. The well is in section 12 of township 13 north, range 10 west, Seward Meridian.

Trading Bay Energy Corp. had Schlumberger reanalyze the old X33-12 well logs in the 1990s, Craig said: "they did an ELAN, computer synthesis of well logs to identify prospective gas zones."

He said the "modern log interpretation techniques indicate several zones of gas-bearing sands that were basically plugged and abandoned back in the '70s."

In addition to this lease, Craig holds several leases to the north as Trading Bay Oil and Gas and as an individual he holds a 50 percent interest in the National Petroleum Reserve-Alaska lease which covers the north half of the Umiat oil field, and still has some involvement in the Ninilchik unit near Clam Gulch.

Pelican Hill is scheduled to complete a multiple gas well exploration and production program on the west side of Cook Inlet later this year, and the companies said the Beluga River prospect will add to Pelican Hill's existing portfolio of drillable prospects.

Gross has been acquiring Cook Inlet acreage since 2001 and now has more than 50,000 acres. He brought a rig to Alaska from Hawaii in July to drill shallow gas prospects on the west side. Rigging up is continuing in south Anchorage, Arlen Ehm, a geological consultant for Pelican Hill's Cook Inlet prospects, told Petroleum News Sept. 3."A considerable effort is being made to adapt this rig to the shallow gas drilling needs on the west side of Cook Inlet," Ehm said.

Gross told Petroleum News in July that he is doing a number of things to reduce the cost of exploring in the Cook Inlet basin: the small, truck-mounted rig; use of temporary mats for roads and drilling pads; drilling with casing instead of drill pipe; and remote mud logging and wireline logging with small tools. (See story in July 27 issue of Petroleum News.)