Cook Inlet Energy planning Otter well

Company drilled sidetrack in late 2013 at Cook Inlet prospect; necessary pad expansion delayed delineation well until early 2016

Eric Lidji

For Petroleum News

Cook Inlet Energy LLC plans to return to the Otter unit next year.

The Alaska subsidiary of Tennessee-based Miller Energy Resources Ltd. is looking to drill a delineation well next winter at the onshore prospect on the west side of Cook Inlet.

The well would target the Beluga formation at a depth of at least 7,000 feet, according to a plan of exploration the company filed with the Division of Oil and Gas in late January.

The company intends to complete drilling by the end of March 2016.

Two wells required

The company drilled the 5,680-foot Otter No. 1 exploration well in mid-2012 to test natural gas targets in the Beluga and Tyonek formations in the northwest corner of the Susitna Flats State Game Refuge. Although mud pump problems prevented the well from testing the Tyonek formation, and from fully testing the Beluga formation, the company later announced “two significant hydrocarbon gas shows in the zone of interest.”

In early 2013, the company applied to form the Otter unit over some 5,855 acres at portions of four leases. The state rejected the application, saying the company had failed to prove it had a viable reservoir and should proceed with exploration on a lease-by-lease basis. Following an appeal, the state approved the unit, but required the company to post a $1.2 million bond and provide drilling dates and surface and bottom-hole locations. By November 2013, the company had met those requirements, according to the state.

The initial plan of exploration required Cook Inlet Energy two drill two wells. The first would either be a deepening of Otter No. 1 using a coiled-tubing unit by March 31, 2014, or a grass roots exploration well slightly to the east of the original well by March 31, 2015. The second well would have been a delineation of either well by March 31, 2016.

The company met the first requirement by completing the 7,021-foot Otter No. 1A sidetrack in December 2013. Plans for the second well were delayed when the company realized it would need a larger rig, which in turn required a pad expansion. The current plan of exploration calls for drilling a well from the expanded pad by March 31, 2016.

Cook Inlet Energy officials plan to meet with the staff of the Division of Oil and Gas in March to present technical information about the proposal, a common step in planning.