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Aurora to drill for oil near Anchor Point Drilling could start in November in onshore geology that looks similar to the neighboring Cook Inlet Cosmopolitan prospect Alan Bailey Petroleum News Staff Writer
Aurora Gas LLC plans to drill a wildcat oil well at the company’s Endeavour prospect, onshore near Anchor Point on the Kenai Peninsula. And drilling could start as soon as November, Andy Clifford, the company’s vice president for exploration, told Petroleum News.
“We’ve been going through a marketing effort to get an industry partner or two to join us (in the Endeavour prospect) since late last year and now we’re in negotiations with two companies,” Clifford said. Clifford declined to comment on which companies are involved in the negotiations.
On Aug. 22 Aurora held an informational meeting at Anchor Point to inform local people of the company’s plans, to discuss possible impacts on the community and to discuss the steps that the company will take to mitigate environmental impacts.
The Endeavour prospect is in the Hemlock and lower Tyonek formations, at depths between 8,000 and 9,000 feet. Clifford said that the stratigraphy and structure of the prospect exactly mirror the nearby, offshore Cosmopolitan prospect — Cosmopolitan is known to contain oil.
“There’s just one syncline between Cosmopolitan offshore and Endeavour onshore,” Clifford said. Consolidating leases Although Aurora acquired the Anchor Point leases from Anadarko some time ago, the company has only recently consolidated its lease holdings to a point where drilling can start — the land ownership situation is fairly complex, with a mix of state, Native and other private land holdings.
“We’ve also got a lot of fee minerals down there too — it’s all subdivisions,” Clifford said. “ … It’s taken two years to accumulate the lease position down there.”
However, because of the extent of private landownership many Anchor Point residents have become stakeholders in the Endeavour project, he said.
And the company has now reached a point where it wants to form a unit.
“We’ve had the first meeting with DNR to investigate the formation of a unit,” Clifford said. Simpler than offshore Although the onshore lease situation is fairly complex, exploration and development should prove much simpler and less expensive than offshore at Cosmopolitan, Clifford said.
In fact Aurora plans to drill from the pad that Unocal constructed for its Griner well a number of years ago. And drilling a vertical well to an onshore prospect is substantially cheaper than drilling a directional well to an offshore target — Clifford said that it should cost about $3.5 million to drill a well at Endeavour and that it would probably take four or five wells to delineate the structure.
“Onshore there at Anchor Point we can use existing roads, existing gravel pads, everything will be hidden and buried and tucked away,” Clifford said.
But drilling to depths in excess of 8,000 feet will require a contract for the use of a reasonably powerful rig — the rig that Aurora uses on the west side of the Cook Inlet drills relatively shallow holes.
An ability to use the route of the highway from Anchor Point to Nikiski to build a buried pipeline should simplify pipeline construction.
“It’s probably the best place to have to do it — it’s along an existing highway,” Clifford said.
And the potential for finding gas in addition to oil reduces the economic risk of the project.
“There’s gas all the way down … so we may make a gas well out of it rather than nothing,” Clifford said. Not seasonally restricted Because Aurora will be drilling from private land, permitting should prove fairly straightforward. And the use of existing roads and drilling pads eliminates any seasonal restrictions on when drilling can take place.
“We can basically drill any time as soon as we’re ready,” Clifford said.
Aurora expects that the use of existing roads and pads will minimize any environmental impacts from the work. However, the company is planning substantial measures to protect the environment and to minimize disturbance to the local community. For example, berms will prevent oil spillage from the drilling rig and there are minimum spacing requirements between wells and rivers, lakes or streams. Aurora has joined Cook Inlet Spill Prevention and Response Inc., the oil spill response cooperative for the Cook Inlet. Long time interest in oil Clifford said that although in the past Aurora has explored and developed gas prospects the company has been interested in oil exploration for a long time. The company sees tremendous potential for oil onshore as well as offshore, he said. And the acquisition of Anadarko’s leases a few years ago helped gel the company’s oil plans.
“We always had the intention from the beginning … to look at the oil potential because this basin’s produced over a billion barrels of oil since the first discoveries in Swanson River back in ’59,” Clifford said.
Aurora is picking the sweet spots for oil from its portfolio of leases and in some cases shooting some seismic, he said.
Clifford sees onshore oil potential on the west side of the Cook Inlet, as well as on the Kenai Peninsula. In particular, he thinks that the string of oil plays offshore at Trading Bay probably continues onshore north of Granite Point, an area where the Jurassic source rocks for the Cook Inlet oil occur beneath the surface.
“As a geologist I know that the geology doesn’t change at the coastline,” he said. “… (the oil geology) — it’s got tremendous plumbing,”
In fact, after the drilling on the Endeavour prospect Aurora expects to do some deep drilling for oil in the Tertiary at the company’s Aspen prospect; Aspen lies onshore due north of Granite Point. However, the company’s other Kenai Peninsula oil prospect, near Swanson River, requires further investigative work before planning any drilling.
“We’re not quite ready for that one yet,” Clifford said.
Meantime the company is forging ahead with its plans for Endeavour.
“We’re excited by it, Clifford said. “I can’t remember the last time an oil wildcat was drilled in the Cook Inlet."
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