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Independent Pelican Hill adds Cook Inlet acreage, plans to drill next year Company adds 21,543 acres to west side inlet position, adding block onshore west of McArthur River field to 36,684 acres of Mental Health Trust Land leases Kristen Nelson PNA Editor-in-Chief
Pelican Hill Oil and Gas Inc. said Nov. 11 that it has acquired 21,543 acres of state oil and gas leases on the west side of Cook Inlet from Unocal in a farm out.
This is in addition to the 36,684 acres of oil and gas leases the company has acquired from the Alaska Mental Health Trust Land Office.
Al Gross, president of Pelican Hill Oil & Gas Inc., told PNA in November 2001 that he came to Alaska to find acreage with more oil and gas potential than was available in Kansas, where he has operated for almost 25 years and drilled more than 200 wells.
The company acquired its first Alaska oil and gas leases in September 2001, when the San Clemente, Calif.-based company was high bidder on five Alaska Mental Health Trust Land Office Cook Inlet oil and gas tracts. The 25,187 acres are on the west side: three tracts are north of Tyonek, west of the Beluga River gas field; two are west of Tyonek, one at Granite Point near the Nicolai Creek gas field and the other to the north.
In July 2002, Pelican Hill picked up two additional Mental Health Trust Land tracts, some 11,297 acres north of Tyonek, based on payment of the first year’s rent ($11,298) and a work plan for the tracts. The company now has 58,277 total net oil and gas lease acres.
All of the Pelican Hill acreage is onshore on the west side of Cook Inlet.
The company’s newest acreage, just acquired from Unocal, is in township 9 north, ranges 14 west and 15 west, Seward Meridian, approximately six miles west of the giant McArthur River field, which has been producing oil and gas since the mid 1960s.
Pelican Hill said Nov. 11 that it “plans to immediately begin the exploration of this block known as the Iliamna prospect.”
First tracts in 2001 Gross told PNA in 2001 that he looked at Alaska a few years ago, but walked away.
“A year ago, I looked at it a lot harder,” he said.
He connected with local geological consultant Arlen Ehm, started making trips to Alaska, and in September 2001, bid $258,359 for the five Mental Health Trust Land tracts.
By the time the leases had been issued, Gross was planning seismic for early 2002.
“I don’t buy leases just to own them as a lease position asset,” Gross told PNA, “… I buy them for a reason: that’s to shoot them and then to go drill them.”
The company shot 3-D seismic in the winter of 2002 and is now planning to drill. Drilling the goal Pelican shot 3-D seismic over its leases in the winter of 2002 and is planning to drill, looking for gas in shallow to moderate depth reservoirs on the west side of Cook Inlet.
The company is spending some $2 million in Alaska in 2002 and plans to spend some $6 million to $10 million in 2003 on 3-D seismic surveys and four to six wells, with another four wells anticipated for 2004 and possibly more 3-D seismic.
Gross told PNA in 2001 that he is considering bringing in a rig, if one isn’t available.
The leases Pelican Hill has are reasonably close to infrastructure, Gross told PNA: “And that’s the key to the Cook Inlet and anywhere, whether you drill in Kansas, Oklahoma, Texas — the infrastructure’s got to be there.”
Gross told PNA he is also interested in other areas of Cook Inlet. “We have had the luxury of using all the information acquired by Arlen (Ehm) to pick these locations that we went after with Mental Health. We are also exploring the different areas of Cook Inlet.”
He noted that changes in the industry, such as mergers of larger companies, sometimes create opportunities for independents, as larger companies abandon fields.
“It’s happened in Kansas where I drill, where a lot of the majors pulled out of there five, six years ago.
“And we got the leftovers and it’s made us very successful,” Gross said.
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