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Prodigy looking for Cook Inlet partners Former ARCO Alaska landman Mark Landt, now a Prodigy VP, says it’s time for a second wave of Cook Inlet exploration Kay Cashman Petroleum News Publisher
Prodigy Alaska is looking for partners to help drill its Northern Lights oil prospect in Cook Inlet, the company’s vice president of land and new business ventures, Mark Landt, told Petroleum News.
“We have an international marketing effort going on through Waterous Securities Inc. out of Calgary. They are a large, international energy acquisitions and divestitures firm,” Landt said.
The Prodigy offering is on Waterous’ web site at http://www.waterous.com/prodigy2003/overview.asp.
Waterous says Prodigy has 10,195 acres in the Cook Inlet prospect.
But the Irving, Texas-based independent added to its inlet acreage at the May 7 Cook Inlet areawide oil and gas lease sale where it was the largest bidder, picking up seven leases along the Northern Lights structure for $415,369. (See story on page 1.)
The seven leases totaled 21,120 acres, effectively tripling the company’s leasehold in Alaska, which was 9,683 acres prior to the sale. (The 9,683 acres were acquired in the state’s 2001 Cook Inlet areawide lease sale.)
Prodigy also recently purchased three leases that Dan Donkel and Robert Bolt picked up in last year’s Cook Inlet areawide sale. One tract is south of the Trading Bay unit. Tracts 499 and 349 are along the Northern Lights structure, which stretches 22 miles south from the North Cook Inlet unit, near Forest Oil’s Corsair prospect on the southern end of the anticline, Donkel said.
Assuming Prodigy is issued the tracts it was high bidder on in the May 7 sale, Landt said Prodigy’s total Northern Lights acreage now totals about 34,000 acres. Targeting Tyonek Deep Potential oil reserves for the 10,195 acres advertised on the Waterous web site are tagged at 309 million barrels, consisting of “80 million barrels of probable reserves, 78 million barrels of possible reserves and 151 million barrels of resource potential.” Peak production is forecast at 34,000 barrels per day.
Prodigy is targeting the Tyonek Deep, a deep oil zone that was previously drilled by ARCO Alaska and Phillips.
“There have been 16 wells drilled on the Northern Lights anticline — once called Tyonek Deep and before that Sunfish — and all the wells had oil shows or tested oil. We’re about a half mile from ARCO’s North Foreland State No. 1 well which tested from three zones, on a sustained test, at about 3,600 barrels per day,” Landt said.
“It was after drilling that well that ARCO and Phillips in a joint venture said they had 750 million barrels out there,” he said.
Landt worked for ARCO Alaska from 1992 to 1997, serving initially as district land manager for Cook Inlet.
“Sunfish and North Foreland were my wells,” he told Petroleum News in a 2001 interview. “I saw an opportunity south of the North Cook Inlet field but ARCO walked away from it.” What went wrong at Sunfish? Why did both ARCO and Phillips back out of the Sunfish/Tyonek Deep prospect?
“I can’t speak for ARCO but in my opinion the project was overcapitalized. Between ARCO and Phillips they had something like $300 million invested in that project. $67 million in the leases alone. … Some of the same leases we’ve acquired for a lot less,” Landt said May 7.
“They brought another jackup in and drilled another well down south (of North Foreland State No. 1) and got less than expected results; plus, at that time oil prices were coming down. They were in the $10 to $14 per barrel range. Clearly an offshore development in the Cook Inlet would be hard to make work at those kinds of price levels,” he said.
But more than the price of oil has changed since ARCO and Phillips drilled Tyonek Deep. Technology has improved, Landt said.
“Given the cost structure that Forest has done in Cook Inlet and with what it found in Redoubt, you don’t have to assume a traditional cost structure for an offshore Cook Inlet development anymore,” he said. “I’m not saying we’re proposing to do the same type of development,” but the costs of doing business in the inlet have come down. (A state official said $125 million for a Cook Inlet platform was the norm 10 years ago as compared to the $35 million Forest spent on its Osprey platform for its Redoubt Shoal project.) Ready to drill Prodigy is eager to drill delineation wells at Northern Lights.
“Our plans are to drill as soon as we can get funding,” Landt said. “And as soon as we can get a jack-up rig.”
Prodigy and Forest were looking at bringing in a jack-up rig for the summer of 2003, but “we both needed partners before we could commit to a rig. We’re hoping we can drill in 2004,” Landt said. “There’s ample opportunities to keep a jackup busy drilling exploration wells in Cook Inlet for years, for multiple-multiple seasons.”
The inlet, he said, has had no second wave of exploration. There was a first generation of exploration in Cook Inlet and then explorers were diverted to the North Slope. … And it just died. And it never came back.
“The drilling that ARCO did back in the early ‘90s was not exploration. The Tyonek had already been discovered, there had already been oil found in that deeper Tyonek section… it was more delineation. But there’s been no drilling really, no drilling off the flanks of some of these big structures. There’s been no drilling for deeper exploration, in the Jurassic or even Hemlock in many cases,” Landt said.
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