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This month in history: Forest Oil's Kustatan fully operational
This month in history: Forest Oil's Kustatan fully operational
20 years ago this month: Delayed tankers at Drift River terminal slow Redoubt Shoal oil sales after onshore facilities completed
Kristen Nelson Petroleum News
Editor's note: This story appeared in the May 18, 2003, issue of Petroleum News Alaska.
Forest Oil's Redoubt Shoal development in Cook Inlet, Alaska, is online, although perhaps not as fast or as smoothly as the company would have liked.
Craig Clark, Forest's president and chief operating officer, told analysts May 9 that the company's main Redoubt facilities were completed in the first quarter, with "full startup of our Kustatan oil and electrical generation facilities." The Kustatan facilities are onshore on the west side of Cook Inlet, drilling is from the company's Osprey platform in the inlet.
The company has also added two wells, he said, including the drilling and completion of the sixth well in April with production at more than 800 barrels of oil a day and 1,000 barrels of water. Forest is producing "around 4,000 barrels of oil a day from four wells," he said. The Redoubt Shoal No. 3 has been completed as a gas well and the Redoubt Shoal No. 4 is being sidetracked as an oil well.
But while the Kustatan facilities became fully functional in February, oil from the company's new Redoubt Shoal field hasn't added as much as it could have to the company's bottom line because of tanker delays at Drift River where the oil is loaded for shipment.
"Oil inventory buildup in Alaska as a result of the delayed tanker liftings cost us approximately 6 million (cubic feet per day equivalent)," said Dave Keyte, the company's executive vice president and chief fiscal officer. "That is, sales volumes for the quarter were under the actual volumes by 6 million (cubic feet equivalent) a day."
Production not at top end of range For all its operations, the company reported 256.3 million cubic feet of gas a day and 23,100 barrels of oil per day, with net daily sales volumes of 394.7 million cubic feet equivalent per day. Redoubt Shoal is averaging approximately 4,000 bpd of oil from four wells.
Comparing first-quarter performance to projections, Keyte said: "in general we've reduced the top end of our production range due to being slow out of the chute at Redoubt Shoal."
The company reported that its Kustatan onshore production facilities and electrical generators became fully operational in February, and the Redoubt Unit No. 5A well was placed on production in the first quarter.
The Redoubt Unit No. 6 well was completed and placed online in April at a rate of 881 barrels of oil and 1,078 barrels of water per day.
Clark said near-term challenges include increasing production at Redoubt.
In its first-quarter operational update Forest said recent activity at Redoubt has included repairing the electrical submersible pump in the Redoubt Unit No. 1 well and completing the No. 3 as a gas well. That well recently tested at 8.6 million cubic feet a day. The company is sidetracking the previously drilled No. 4 well, and said it plans to produce the No. 3 as a gas well and complete the No. 4 as an oil well prior to beginning the drilling of the No. 7. The company plans to have eight completed wells at Redoubt by the end of this year, seven oil wells and one gas well, which will mean adding three more wells this year, Clark said.
Clark said the company also has production of approximately 3 million cubic feet a day from its onshore West Foreland gas well, which is used to reduce Redoubt and Trading Bay field use. The No. 3 gas well at Redoubt may be used for either fuel gas or gas sales, he said.
Goal to improve production Clark said that the company had some downtime built into its Redoubt Shoal production figures for the first quarter, and really the tanker lifting was the only shortfall. He said the goal at Redoubt is to reduce downtime and improve production beyond the average of 1,000 barrels per day per well.
"Our peak days are better than that," he said.
Clark said the company's ability to sustain higher production should improve as the drilling rig moves to another leg. Right now, he said, it's sitting on top of the producing wells.
On the tanker issue, Clark said the winter weather has an impact. "These are smaller tankers so they have to deal with the weather."
But, he said: "The delays are not acceptable and will be addressed in our new contract."
Clark also said that startup at Kustatan alleviated some of the tanker difficulties. The company has half a million barrels of storage there, he said, "plenty of room for that oil and anymore that we might find."
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