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Cook Inlet Energy gets boost for Sword Alaska regulators allow commingling of oil production from multiple zones in well; parent company discloses new loan, tax credits
By Wesley Loy For Petroleum News
Cook Inlet Energy LLC has won approval from Alaska regulators to commingle production from multiple zones in the company’s Sword No. 1 well.
The company first brought Sword online in November 2013.
The exploratory well was drilled on land from a site near the company’s West McArthur River oil field on the inlet’s west side. The well angles out to a bottomhole location beneath the inlet.
On May 1, Cook Inlet Energy asked the Alaska Oil and Gas Conservation Commission to allow downhole commingling of production from three oil zones: the Hemlock, the Lower Tyonek G and the Lower Tyonek G Upper.
The commission approved the commingling with a June 26 conservation order.
“Commingling production from the three zones will increase the flow rate from the well and thus improve the economics for the well, which will prevent waste and lead to increased ultimate recovery from the well as compared to producing the zones separately,” the order said.
Aggressive program Cook Inlet Energy, based in Anchorage, is a subsidiary of publicly traded, Tennessee-based Miller Energy Resources Inc.
Miller, in an investor presentation posted on its website on June 24, said the Sword No. 1 well had produced about 116,000 barrels of oil.
Miller and Cook Inlet Energy launched as an Alaska operator in late 2009. Since then, they have pursued an aggressive program of drilling and asset acquisition. Their producing properties in the Cook Inlet region include the offshore Redoubt unit, the West McArthur River oil field and the North Fork natural gas field.
The company is aiming to close a deal by November for a controlling stake in the small Badami oil field on Alaska’s North Slope.
Nearly all of Miller’s oil and gas production comes from the Cook Inlet region, where gross production was 3,000 barrels of oil equivalent per day at the end of April, the investor presentation said.
In a June 30 filing with the U.S. Securities and Exchange Commission, Miller said it had taken out a $10 million loan, bringing its total borrowing to $30 million under a KeyBank credit facility.
The filing added: “On June 24, 2014, we received from the State of Alaska the proceeds of tax credits totaling approximately $21.8 million.”
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