Pelican Hill pulls out of Alaska

Pelican Hill Oil and Gas is pulling up stakes and leaving Alaska, the company’s vice president of Alaska operations, Arlen Ehm, told Petroleum News March 1. An oil and gas producer in Kansas, the San Clemente, Calif.-based independent first entered Alaska in September 2001.

“Pelican Hill’s partners have decided to not spend any more money in Alaska,” he said.

The company has had disappointing results from the two wells it drilled onshore on the west side of Cook Inlet where it has been targeting natural gas in shallow to moderate depth reservoirs.

“Both were dry holes,” Ehm said, referring to Iliamna No. 1 near Trading Bay, spud in Nov. 4, 2003 and completed in November 2004, and N. Beluga No. 1 north of the Beluga River gas field, spud Nov. 28.

At N. Beluga No. 1 “we recovered saltwater on three formation tests. There was a reservoir, but no gas,” Ehm said.

Pelican Hill will be selling the 18,587 acres it has under lease in the Cook Inlet basin, as well as the Water Resources International Ideco H-35 KD rig it used to drill both wells. Used to drill large-bore water wells in Hawaii and brought to Alaska by Pelican Hill President Al Gross, the small self-propelled carrier-mounted rig was completely refurbished this past year, modified to drill shallow gas prospects to a depth of about 7,000 feet while using the casing drilling method.

Most promising prospect not drilled

The North Pretty Creek wells would have been drilled on state oil and gas lease ADL 390103. The Pretty Creek gas field, discovered in 1979, is two miles southwest of the N. Pretty Creek No. 1 and No. 2 wells, both in section 22, township 14 north, range 9 west, Seward Meridian. An ice/snow pad had been built for the N. Pretty Creek No. 1 well, but it will not be used, Ehm said.

A new barge landing near the Beluga River gas field was being used as the primary terminus for freight transportation for the project. Rig components and supplies were brought to the drill site along the existing road from the Beluga River gas field to the Pretty Creek, Ivan River, Stump Lake and Lewis River gas fields. An airstrip associated with the Beluga River gas field was used for air traffic.

Because Cook Inlet is usually impassible for barges in the winter, most of the expendables for the North Pretty Creek wells were stockpiled in the Beluga area before the inlet became impassible.

Transportation during the winter season was limited primarily to truck traffic between the Beluga staging area and the well sites, with some traffic from transporting cuttings and used mud to the Envirotech facility at Tyonek.

Fuel supply was by air from Kenai to the Beluga airstrip. Some critical items of small freight were flown into Beluga from either Kenai or Anchorage.

The well sites are adjacent to existing roads, approximately 200 feet by 200 feet, with supplies staged off the well site in staging areas along the road, Ehm said.

Ehm said the only wintertime user of the road by the Pretty Creek well sites is Unocal for accessing its Lewis River operations, and that Pelican Hill and Unocal had reached an agreement concerning sharing costs for road maintenance.

Other leases for sale

One additional 3,351 acre Mental Health lease is also up for grabs “in the area of Aurora’s Nikolai Creek unit,” he said.

Three “smaller state leases comprising 880 acres” adjacent to and on the west side of the Beluga River unit, are also on Pelican Hill’s sale list, Ehm said.

Veteran Alaska geologist Ehm, who sat the first well on the first platform in the Cook Inlet in 1965, said he will part ways with Pelican Hill when the company’s Cook Inlet basin leases have been sold.

“I will have a new title down the road,” he said. “Available.”