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Aurora Gas secures $25 million line of equity, accelerating growth Company plans to acquire undeveloped reserves and acreage, particularly on the west side of Cook Inlet, and continue development at Nicolai Creek field Kristen Nelson PNA Editor-in-Chief
Aurora Gas LLC said May 31 that it has arranged a $25 million line of equity with Aurora-KF L.L.C., an affiliate of Kaiser-Francis Oil Co. of Tulsa, Okla., and Cosco Capital Management LLC of New York City. The latter acted as exclusive financial advisor to Aurora with respect to the private placement, the company said.
An initial draw of $5 million was invested at closing.
Aurora is a private, Houston, Texas-headquartered, developer of natural gas in the Cook Inlet. Directly or through affiliates, Aurora said, it has been associated with gas marketing and supply in the greater Anchorage area since 1994.
The company will use the initial capital to acquire and develop proved undeveloped reserves and acreage, primarily on the west side of Cook Inlet, and continue development of the Nicolai Creek field. Company plans to accelerate growth Scott Pfoff, president of Aurora, said the financing affords the company an opportunity to accelerate its growth as a gas producer and marketer in the Cook Inlet area.
Investor Kaiser-Francis said the Aurora Energy investment is part of its “strategy of affiliating with outstanding technical and commercially savvy teams which have demonstrated their ability to develop hydrocarbon reserves at attractive cost outside of our main areas of operational activity.”
The financing will allow Aurora “to aggressively pursue” prospects, leads and development opportunities he has already identified through subsurface geology and 2-D and 3-D seismic on its existing and soon-to-be-acquired acreage, said Andy Clifford, Aurora’s vice president of exploration.
Ed Jones, Aurora’s vice president of production and asset management, said the company will re-complete several wells for production this summer, using technologies standard in other areas.
Aurora said it expects to become a major producer of natural gas in the Cook Inlet area within the next five years. Work at Nicolai began in 2000 Aurora has some 18,000 acres of state oil and gas leases in the Cook Inlet basin.
The company began development at Nicolai Creek in December 2000 with the work over of the Nicolai Creek Unit No. 3 well; production facilities and pipelines for that well were installed between May and October; production began Oct. 3, 2001.
Aurora told the Alaska Oil and Gas Conservation Commission late last year that its 2002 plans include: drilling the Nicolai Creek Unit No. 8 well; re-completing the No. 2 well; re-entering and sidetracking the No. 1A well; and installation of a common production facility and pipeline for these wells.
Drilling of additional wells — in 2003 and beyond — is contingent on the performance of wells drilled in 2002, Aurora told the commission in a Nov. 28 field plan.
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