New rig bound for Alaska’s Cook Inlet

First truckload of rig steel hits road after Houston construction wraps up; rig 35 to be erected on Osprey platform by mid-December

Wesley Loy

For Petroleum News

A new drilling built in Texas for Cook Inlet Energy LLC is now on its way to Alaska.

David Hall, Cook Inlet Energy chief executive, told Petroleum News the first truck carrying rig components left Houston on Sept. 13.

Rig 35, to be erected on the Osprey platform in Cook Inlet, will be hauled in an estimated 40 trailer loads to Seattle, then loaded onto ships for delivery to Anchorage.

From there, the rig will be trucked south to Nikiski and put aboard a platform service vessel for transport to the Osprey platform.

If all goes according to schedule, the rig will be fully assembled on the platform and ready to work by mid-December. And the work will begin right away for rig 35, Hall said.

“We’re going to burn the midnight oil with it — try to get some serious production going,” he said.

Based in Anchorage, Cook Inlet Energy is a subsidiary of Tennessee-based, publicly traded Miller Energy Resources Inc.

In recent months, Cook Inlet Energy restored production from a pair of shut-in wells on Osprey, which previously had been in mothballs due to the bankruptcy of its previous owner.

The company used a light rig known as a hydraulic snubbing unit to reactivate those wells.

With the new rig 35, Cook Inlet Energy aims to greatly boost oil production from Osprey.

“The installation of a rig on our Osprey platform marks a new chapter for Miller in Alaska,” Miller’s chief executive, Scott Boruff, said in a Sept. 13 press release. “We will now be able to target previously producing wells, drill new wells and perform routine and incidental maintenance on the wells that are already producing.”

Rig 35 is a 2,000-horsepower National 1320 model designed for both offshore and onshore drilling, the Miller press release said.

The rig was a $19.5 million purchase for Miller, which drew on a line of credit with New York-based Guggenheim Corporate Funding LLC to complete the transaction.

Voorhees Equipment and Consulting Inc. built the rig and will erect it on the Osprey platform, a process that’s expected to take up to 60 days.

Osprey sits in the Redoubt unit and is the newest and southernmost platform in Cook Inlet. Installation was completed in 2000, but production from Osprey proved a disappointment.

Cook Inlet Energy, with Miller’s backing, bought a package of oil and gas assets including Osprey out of bankruptcy in December 2009.

The company is bullish on Osprey’s prospects.

Hall has said he sees great potential in sidetracking Osprey’s existing wells, and in drilling new wells into the Redoubt Shoal field.

Aside from Osprey, Cook Inlet Energy also operates the West McArthur River oil field on the west side of Cook Inlet.