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Moving in new direction Aurora to drill for oil at Endeavour; signs deal to drill Trading Bay’s Hanna prospect Alan Bailey Petroleum News Staff Writer
In following the company’s original strategy of low-risk drilling in known gas reservoirs Aurora Gas has now drilled all of the easy re-entry wells within its Cook Inlet acreage. As a result, the company is moving into a new era in which it will seek partners for drilling more risky exploration plays, Scott Pfoff, president of Aurora Power Resources Inc., told the Resource Development Council’s annual conference on Nov. 16.
“Aurora will move further out on the risk spectrum,” Pfoff said. “We’re going to have to move more to the more traditional exploratory drilling type activities.” The Hanna prospect As part of this strategy the company is in the final stages of completing an agreement with Trading Bay Oil and Gas LLC, to drill that company’s Hanna gas prospect between Pretty Creek and Lewis River on the west side of the Cook Inlet.
“Aurora will have partners in this well which is a wildcat and hopefully will be drilled in early 2006,” Pfoff said.
Paul Craig, owner of Trading Bay Oil and Gas, has confirmed with Petroleum News that the two companies have come to an agreement regarding the Hanna prospect, although “the ink has not yet dried on the written contract.”
“The intention is for a well to be drilled by the end of March,” Craig said.
Craig said that Trading Bay will have a minority working interest in the prospect and will also retain a small overriding royalty; Aurora will be operator.
And Pfoff said that Aurora is also going to explore for oil in the Cook Inlet area in 2006.
“Aurora is going to bring back oil exploration in Cook Inlet,” Pfoff said.
Aurora is not quite ready to make an announcement about establishing a partnership to drill the Endeavour oil prospect on the Kenai Peninsula, near Anchor Point, he said. Endeavour is in the Hemlock and lower Tyonek formations, at depths between 8,000 and 9,000 feet, and resembles the nearby, offshore Cosmopolitan prospect that contains known oil (see “Aurora to drill for oil near Anchor Point” in the Aug. 18, 2005, edition of Petroleum News). Five gas fields Meantime, Aurora continues with its core business of developing and operating gas fields.
“Today Aurora operates 12 wells in five different gas fields on the west side of Cook Inlet,” Pfoff said.
Pfoff said that total production from the fields has reached about 20 million cubic feet per day.
“By year end we’re anticipating deliverability of about 30 mmcf feet per day,” Pfoff said.
The company’s Nicolai Creek field is now contributing to production, following a proposed resolution to the long-standing dispute regarding access to the Cook Inlet Gas Gathering System, known as CIGGS. Nicolai Creek connects to CIGGS and had been shut in since the end of 2004 because of a dispute regarding commercial terms for access to the pipeline system.
“As of Nov. 1 this field is back on production and we look forward now to development of this field further,” Pfoff said. Three Mile Creek Aurora’s new Three Mile Creek field came on stream in 2005 — the discovery well at the field is on production and the company is in the process of completing and testing the Three Mile Creek No. 2 well.
“We will proceed with the tie in of Three Mile Creek No. 2 and have it on production and selling gas within the next few weeks,” Pfoff said.
However, the company has decided to postpone drilling Three Mile Creek No. 3 until next year, he said.
The Moquawkie field now contains three productive wells. For two of these wells Aurora reentered old wells drilled by other companies. Aurora drilled the third well this summer, Pfoff said. Lone Creek The Lone Creek field has two producing wells — a third development well at Lone Creek has proved particularly successful, with a flow of about 16 million cubic feet per day from several intervals.
“Lone Creek No. 3, drilled and completed this year, is our best well to date,” Pfoff said.
On the other hand, drilling at the Kaloa field this summer illustrated the risks inherent in oil and gas development.
“We had the very unpleasant experience of drilling a development well this summer that was a dry hole,” Pfoff said. “It served as a stinging reminder that this truly is a risky business — we’re dealing with complex geology.”
But Pfoff emphasized his company’s determination to continue a strategy of pursuing the discovery and development of natural gas in the Cook Inlet area. For 2006 you can expect a combination of more of the same type of work as in 2005 and some exciting new endeavors, he said.
Pfoff likened pending shortages of natural gas in Southcentral Alaska to hurricane Rita.
“Just like Rita we know she’s coming and we know it’s going to be a problem, and we just don’t know when and how hard a hit it’s going to be,” Pfoff said. “But the good news is we still have time to prepare.”
We need more companies out there looking for gas, he said.
“We will continue to work Beluga sands on the west side of the Cook Inlet,” Pfoff said “Our goal and company strategy is to increase natural gas reserves in Cook Inlet.”
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