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State, feds OK Cosmopolitan unit Phillips Alaska and Forest Oil combined have 90 percent of interest; Hansen No. 1 exploration well being drilled now Kristen Nelson PNA Editor-in-Chief
The Alaska Department of Natural Resources Division of Oil and Gas and the U.S. Department of the Interior Minerals Management Service have approved Phillips Alaska Inc.’s application to form the 24,600 acre Cosmopolitan unit in Cook Inlet north of Anchor Point. The other majority working interest owner is Forest Oil Corp.
Cosmopolitan includes nine leases, seven state and two federal, 9,765 federal acres in the outer continental shelf and 14,835 acres in state of Alaska lands in sections 15-17, 20-23, 26-27, 33-35 of T3S-R15W, SM; sections 2-10, 16-19 T4S-R15W, SM; and sections 13 and 24 T4S-R16W, SM.
The target is a potentially oil-bearing reservoir in the Hemlock formation which Phillips is drilling now at the Hansen No. 1 well from an onshore surface location on private land to an offshore bottomhole in the unit.
MMS approval came Nov. 15; the state signed off Nov. 16.
Some leases would have expired this year Two of the state leases in the unit would have expired Dec. 31 if the unit had not been formed. Other state leases have expiration dates in 2003, 2007 and 2008. The two federal leases have expiration dates of July 31, 2002.
One of the state leases, ADL 18790, was issued in 1962, and is held because a well capable of production was drilled on the lease.
Two wells were drilled in the prospect, which was identified in the 1960s. The discovery well, Pennzoil Starichkof State No. 1, was drilled in January 1967 from an offshore location and penetrated a hydrocarbon-bearing section.
A second well, Pennzoil Starichkof State Unit No. 1, was spud in August 1967 approximately 2.5 miles north of the discovery well. The reservoir was wet in the second well and the project was abandoned. The discovery well was suspended and was subsequently certified by the state as capable of production in paying quantities.
Drilling at prospect has begun The initial plan of exploration requires that Phillips drill the Hansen No. 1 well to depths sufficient to penetrate the lower Tyonek sand prone interval — correlative to the section seen in the Starichkof State No. 1 well between 6,740 feet and 7,006 feet measured depth or 6,500 feet total vertical depth, whichever is the lesser depth. Phillips was required to begin the Hansen No. 1 before Dec. 31 and to reach target depth by Sept. 1, 2002. Phillips is currently drilling that well.
The initial plan of exploration also requires acquisition of a minimum of 30 square miles of 3-D seismic or a second well. A sidetrack of the Hansen No. 1 with a bottomhole location more than 500 feet from the initial well to target depth would satisfy the second well requirement.
The unit will only continue past its initial term — three years — if further appraisal, delineation or development/production activities satisfactory to the state are proposed before the end of the initial plan of exploration. Those activities would be addressed in a second plan of exploration or in a plan of first plan of development.
Phillips and Forest majority owners Phillips and Forest control 90.52 percent of the unit area. The Cosmopolitan unit joint operating agreement specifies agreement of two or more parties with at least 61 percent working interest for the drilling of wells, and the agreement of two or more parties with at least 80 percent working interest for development and production operations.
The state said that 100 percent of the lessees are not committed to the unit, but Phillips has demonstrated that a reasonable effort was made to get 100 percent participation and that the two companies between them hold sufficient interest in the unit to control operations during the term of the initial plan of exploration.
The four minority working interest owners all hold interests in the lease held by the discovery well. Forest Oil has the majority interest in that lease, 41 percent; 25 percent is held by Devon Energy Corp.; 25 percent is held by ExxonMobil; 4.7 percent by Rosewood Resources Inc.; and 4.2 percent by Hunt Petroleum Corp.
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