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Phillips files application to unitize lower Cook Inlet leases Two three and a half mile extended reach wells being permitted for Cosmopolitan unit; production likely to qualify for 5 percent discovery royalty Kay Cashman PNA Publisher
In August, Phillips Alaska Inc. filed a final application with the state Division of Oil and Gas and the U.S. Minerals Management Service to unitize seven state lower Cook Inlet leases, totaling 24,600 acres, and two federal Outer Continental Shelf leases, totaling 9,765 acres.
Working interest owners in the proposed Cosmopolitan unit are field operator Phillips and Anadarko Petroleum Co, Forest Oil Corp, Rosewood Resources Inc, Devon Energy Corp, ExxonMobil and Hunt Petroleum Corp.
Anadarko is in the process of exiting the unit area. Its interests in state leases in the unit have been assigned to Phillips and its interests in the two federal leases are in the process of being assigned to Phillips. Close to old Starichkof State No. 1 well Phillips is permitting two wells from private land on a bluff overlooking Cook Inlet about one quarter mile from Stariski Creek. Their sidetracks will extend up to 18,500 feet (3.5 miles) to reach offshore bottom holes at approximately 7,000 vertical feet.
The target is a potentially oil-bearing reservoir in the Hemlock formation.
The 4.6 acre drilling pad, located five and a half miles north of Anchor Point and a half mile west of the Sterling Highway, is being built this summer.
Drilling is expected to begin on the Hansen No.1 well in September or October and continue for 150 to 240 days. The targeted bottom hole location is 1,172 feet FNL and 585 feet FWL of section 33, township 3 south, range 15 west, Seward Meridian on state oil and gas lease ADL 384403. The rig that will be used is Nabors Alaska rig 273, which is being brought up from Wyoming.
The well will be drilled to depths sufficient to penetrate the Lower Tyonek sand prone interval correlative to the section seen in the old Starichkof State No. 1 well.
No exploration was required on the federal leases at this time, MMS told PNA.
Mike Richter, Phillips Alaska’s former vice president of exploration and land, told PNA in an earlier interview that he thought the Hansen well might have the longest reach of any well in Cook Inlet, although he said there are some pretty long-reach wells at the West McArthur River field.
“It’s not the longest in Alaska, that’s Niakuk. This is some 15,000 feet. And the North Slope wells reach further,” Richter said. Hoping for higher gravity oil The bottom holes of the two Cosmopolitan wells, Hansen No. 1 and Hansen No. 2, are just northwest of the former Starichkof unit where Pennzoil Co. found commercial quantities of oil and gas in 1967 at the offshore Starichkof State No. 1, a 12,112 foot vertical hole.
Recovered oil from that well included 30 barrels of 20 degree API gravity from a drill stem test at about 6,900 feet and 21 barrels from a drill stem test at about 6,800 feet. Pennzoil reported encountering the top of the Hemlock formation at 6,745 feet.
A second well, the 8,775 foot Starichkof State Unit No. 1, was also drilled in 1967, some two miles from the first well. Pennzoil found water in the Hemlock formation at 7,355 feet and a slight amount of gas around 4,000 feet.
Phillips has done some chemical analysis of the Starichkof oil, which was thought to be low gravity crude. The company believes that new drilling will show the actual oil gravity is significantly higher. Eligible for 5 percent discovery royalty State officials told PNA that Cosmopolitan production is likely to be eligible for the state’s discovery royalty of as little as 5 percent, versus a more standard 12.5 percent royalty, because it is near Starichkof State No. 1, an old discovery well named in state statute.
As part of their exploration plan, the working interest owners must commence drilling a well by Dec. 31, or the unit will be automatically terminated. Failure to drill to drill to the proposed target depth by Sept.1, 2002, will also result in automatic termination.
The owners must also commit in writing to acquire a minimum of 30 square miles of 3-D seismic survey on or before the first anniversary of the unit. The seismic must be acquired by the third anniversary or the unit will terminate.
In lieu of the commitment to acquire seismic, working interest owners may commit to a second well by the first anniversary of the unit and drill the second well by the third anniversary of the unit.
A sidetrack of the well to target depth and with bottom hole location more than 500 feet from the bottom hole location of the first well will qualify as a second well, state documents said.
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