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Miller Energy projects 4,000 boe a day Alaska subsidiary Cook Inlet Energy works to rehabilitate wells on Osprey offshore platform, signs new natural gas sales agreement By Wesley Loy For Petroleum News
Miller Energy Resources Inc. of Tennessee says it’s on track to achieve production by year’s end of more than 4,000 barrels of oil equivalent per day.
Anchorage-based subsidiary Cook Inlet Energy LLC accounts for the bulk of Miller’s production.
Cook Inlet Energy launched as an Alaska operator in late 2009, and has come a long way from a starting point of essentially zero production.
The company’s focus has been on reviving the collection of shut-in west inlet assets it acquired out of the bankruptcy of Pacific Energy Resources Ltd.
Cook Inlet Energy has production from two main properties: the West McArthur River oil field and the Osprey platform in the offshore Redoubt unit.
The company recently boosted its crude oil production to more than 2,100 barrels per day after bringing a sidetracked Redoubt unit well onstream.
Workover program under way Miller has been aggressively raising cash, and on July 3 announced it had completed a public offering of preferred stock, raising gross proceeds of $7.2 million. The company had priced the stock at $21.50 per share. Miller’s common stock is listed on the New York Stock Exchange and closed on July 2 at $3.92.
Cook Inlet Energy is in the middle of an extensive well workover program on its Osprey platform, which currently has two oil wells and two natural gas wells producing.
The company is moving now to rework the RU-1 well. The job will involve abandoning the lower part of the well and drilling a sidetrack to a new bottom hole location at about 15,500 feet, similar to that of the original wellbore. The company said it expects to complete the sidetrack and have the well online by early August.
Cook Inlet Energy did extensive work on RU-1 once before, removing some 35,000 pounds of “fish” such as electric submersible pumps, packers, valves, clamps, straps and cables.
After removal of the fish, the well produced for a time, and the company now feels it’s best to sidetrack the well above some obstructions still remaining in the hole. This should improve flow rates substantially, the company said in a July 2 press release.
Expanded gas sales announced Miller also announced recently that Cook Inlet Energy has secured a new commercial gas sales agreement. The company did not identify the other party, and said certain terms of the deal are confidential.
The agreement allows for Cook Inlet Energy to sell gas “on a discretionary basis” in volumes up to 10 million cubic feet per day.
The agreement will remain in effect until the end of March 2014, and the company is in negotiations for a long-term agreement.
The new agreement replaces an initial, smaller gas sales agreement announced in May.
Aside from its gas production on Osprey, Cook Inlet Energy is actively exploring a number of onshore gas prospects on the inlet’s west side.
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