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The Explorers 2019: Development Furie’s focus at Kitchen Lights
One of the more intriguing exploration targets is oil in the deep Jurassic at 20,000-plus feet, making drilling expensive Kay Cashman Petroleum News
With the seventh plan of development for its offshore Kitchen Lights unit not due until October 2019, Furie Operating Alaska has offered only a glimpse of its exploration plans for the gas producing Cook Inlet field beyond that time.
It is certain, however, that the Texas-based independent exceeded its exploration commitment in its current development plan by testing a seismic anomaly in the Tyonek, drilling an “exploration tail” from its A-4 development well into the formation, which was below the Beluga formation, from which natural gas production was to come.
Unfortunately, per a February 2019 Enstar Natural Gas Co. filing with the Regulatory Commission of Alaska regarding Furie’s temporary problem in delivering gas to the Southcentral utility due to freezing water combining with gas to form solid hydrates, it appeared the drilling into the Tyonek formation proved disappointing.
Story began with Escopeta The history of the Kitchen Lights unit dates back to mid-2009 when the Alaska Department of Natural Resources’ Division of Oil and Gas approved creation of the Kitchen Lights unit, combining the Kitchen, Northern Lights and Corsair prospects.
Unit approval was a culmination of efforts by leaseholders and the state over a number of years to find a way to get drilling done on a series of prospects in Cook Inlet, originally held by different leaseholders but by then consolidated with Escopeta Oil Co. under the leadership of Danny Davis.
At that time only one of the prospects, Corsair, had seen a drill bit.
Shell, Phillips and ARCO had drilled exploration wells in the Corsair prospect from 1962 to 1993. Four of the wells targeted oil; one targeted gas. The wells had gas shows - some also tested small quantities of oil.
The Northern Lights prospect, south of the North Cook Inlet unit along the anticlinal trend that connected it with the Corsair structure, was targeting a downdip extension of Tyonek Deep oil reservoirs encountered in most deep North Cook Inlet wells.
“The play depends on the Tyonek Deep sands extending some distance south of the North Cook Inlet unit and still remaining in the oil column,” the division said at the time.
Internal changes aside, in 2011 Escopeta was essentially restructured and renamed Furie and came under different leadership.
A major milestone occurred later that year when the company announced the discovery of a large natural gas field during the drilling of the KLU No. 1 well from the Spartan 151 jack-up rig that Davis had brought to Alaska.
Furie’s Alaska leadership changed again in 2018 when Scott Pinsonnault, the company’s chief operating officer, took the helm. He has been augmenting the Anchorage staff, adding a new vice president of operations, an HSE official and contracted with Petrotechnical Resources of Alaska to manage Furie’s capital program for 2018. PRA completed its contract commitment in December 2018.
Plans for 2019 exploration According to a state notice approving the company’s latest, and sixth, plan of development in December 2018, Furie completed its planned 2018 Kitchen Lights drilling program.
In 2017, the division had issued Furie a notice of default and opportunity to cure because, the agency said, the company had failed to meet drilling and development commitments.
But, in the new plan approved in December 2018, the division said that with Furie having complied with its commitments, the state was curing the default.
Completion of the A-1 and A-4 development wells in 2018 would allow the field to produce natural gas from four wells, a contractual requirement for Furie’s gas supply agreement with Enstar. (Kitchen Lights’ Julius R. platform has six well slots.)
In addition to development and maintenance activities in 2019, Furie would like to drill exploration wells in the Kitchen Lights unit but, to do so required additional financing and the payment of state tax credits it was owed, the plan of development approval said. (Following fiscal problems resulting from the plunge in oil prices in 2014, under the leadership of then-Gov. Bill Walker, the state delayed payment of production tax credits that were owed to companies such as Furie.)
“Exploration activities have been severely constrained by the state’s lack of any meaningful payment for outstanding production tax credits for the last several years - and the absence of any payment for this fiscal year,” the plan of development said.
By February 2019 the company had planned to mature two prospects outside the Corsair block of the unit, and to present the results to the division, together with evidence that reasonable efforts were underway to drill exploration wells in 2019 or 2020. (The unit was divided into four blocks - Corsair, North, Central and Southwest - all offshore in Cook Inlet, with development drilling taking place in the Corsair block.
Unfortunately, hydrate blockages in the pipeline that delivered gas to shore from Furie’s offshore platform although cleared out, apparently held up this process.
“We have safely restored utility and communication between our onshore natural gas processing plant and the Julius platform over this past weekend,” Pinsonnault told Petroleum News in a March 19 email. He said Furie would spend the next few weeks making sure that the line was completely clear, functional and safe before restoring gas production from the field.
Drilling deep for oil One of the more intriguing exploration targets in the Corsair block was oil in the deep Jurassic strata underlying the Tertiary rocks that host producing oil and gas fields in the Cook Inlet basin.
The proposed well, KLU No.6, would be drilled to a depth of approximately 24,000 feet previous company plans have noted.
But drilling that deep would be costly, part of the dilemma facing Furie.
In the Kitchen Lights, or KLU, unit sixth plan of development, approved in December 2018, Furie said it intended to continue exploration drilling throughout the KLU to the extent it could do so safely while continuing to develop and produce from the Julius R. Platform.
As to potential exploration well locations, Furie's plan said its technical team was analyzing 3-D and 2-D seismic and well data as part of an in-depth analysis of the entire KLU and anticipated it would propose an enhanced suite of targets outside the Corsair block for exploration drilling over the next few years. The analysis was expected to continue into 2019.
As of April 5, 2019, Furie had submitted no revisions to the well locations in its 2016 map (see map in this story) but it did say that it expected the vertical well “bottom hole locations will coincide with the tophole coordinates” provided in the 2016 map.
Accordingly, Furie proposed that by February 2019, provided additional financing was available, it would mature two prospects for exploration wells outside Corsair and present them to the division along with evidence that commercially reasonable efforts were underway to drill these wells in either 2019 or 2020.
The company reiterated that drilling one of these wells would greatly depend on the amount and timing of payments by the state for outstanding production tax credits.
The division’s approval of the sixth POD also required Furie to submit a proposal to the division for the establishment of a participating area, or participating areas, in the KLU by March 1, 2019.
Per the division, Furie applied for two participating areas on March 1 - the Corsair Sterling PA and the Corsair Beluga PA.
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