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Providing coverage of Alaska and northern Canada's oil and gas industry
July 2003

Vol. 8, No. 30 Week of July 27, 2003

Sea change

Pelican Hill brings rig, new drilling technique, to Alaska’s Cook Inlet

Kristen Nelson

Petroleum News Editor-in-Chief

Al Gross of California-based Pelican Hill Oil and Gas has drilled more than 200 wells in Kansas and is about to drill his first wells in Alaska, on the west side of Cook Inlet.

Gross is doing a number of things to reduce the cost of exploring in the Cook Inlet basin: he has brought in a small, truck-mounted rig from Hawaii. He will be using temporary mats for roads and drilling pads. He will be drilling with casing instead of drill pipe. And he will be using remote mud logging and doing wireline logging with small tools.

Gross acquired his first Alaska leases in September of 2001 at a Mental Health Trust Land Cook Inlet oil and gas lease sale and later added to those trust leases, for a total of more than 30,000 acres. He shot 3-D seismic in the winter of 2002, and acquired 21,543 acres of state oil and gas leases on the west side of Cook Inlet from Unocal in a farm out last November, for a total of more than 50,000 acres.

This year Gross is set to drill eight wells, four each on two prospects, he told Petroleum News July 17 as the company was setting up the rig it will use at the Oilfield Transport yard in Anchorage. Gross said it will take three or four weeks to get the rig ready. It will then be barged to the west side of Cook Inlet to drill.

The rig belongs to Water Resources International of Hawaii, and arrived in Anchorage from Hawaii July 12. It will be fitted with a top drive and winterized before it is moved across the inlet.

The wells Gross plans this year will be drilled using a technology, casing drilling, which is new to the state, and will be drilled from a pad of interlocking polyethylene mats, which will also be used for temporary roads needed for the project.

Casing drilling

Gross has contracted with Canada-based Tesco Corp. to use that company's trademarked casing drilling processing for his Alaska wells. A Tesco top drive will be installed on the rig in Anchorage. Instead of drilling with drill pipe, then pulling the drill pipe out and inserting casing, wells are drilled using casing, which is then cemented in place.

The casing “stays in the hole,” Gross said. “We'll cement right through the bit.” He said he expects this drilling method to be “faster, less expensive (and) safer.”

Anchorage-based Arlen Ehm, a geological consultant for Pelican Hill's Cook Inlet prospects, said the top drive provides an additional benefit: you never lift the pipe back up, unlike conventional drilling where you pull out about 30 feet to add a joint.

“In Cook Inlet, the coals cave off to the side of the well and the other rocks are fractured and they fall off, and so quite often you don't get back to the bottom” of the hole after you pull out to add a length of pipe. “With this, the bit drills down, it stays there while you add another joint at the top,” because the power isn't in the rotary table on the rig floor, but in the top drive up on the mast of the rig.

Portable road, drill pad

The temporary mat system will be used for both drilling pads and temporary roads into the sites. Dennis Swathout of Compositech, the mat supplier, said 754 of the mats make up a mile of road, and with additional mats for a 100 foot by 100 foot drilling pad, the project will require about 1,000 of the mats. They are moved into place with a front end loader and then positioned and locked into place by hand. The polyethylene matting is the first containment against anything reaching the ground, Swathout said, and the mats are put down on a polyethylene liner which provides secondary containment.

Ehm said this is the first time the mat system will be used for Cook Inlet drilling although the mats have been used in Cook Inlet for construction of the Kenai Kachemak Pipeline.

The mats are already in use on the North Slope by Anadarko Petroleum and ConocoPhillips Alaska, Swathout said. And Alyeska Pipeline Service Co. is using the mats for all of its temporary road needs on tundra.

Experienced crew

Gross said that while some of the technology is new, an experienced crew will be doing the drilling

He said Pelican Hill is using local help, but has brought in drillers and a tool pusher who have worked on the Water Resources rig. Between the drillers, the tool pusher, Blaise Clay — vice president of rig owner Water Resources — Gross and Ehm, “I added this up: we have close to 196 years of experience in the oil patch,” Gross said.

The crew will stay at the Unocal Trading Bay production facility, Ehm said. “The barge site's right there and we'll be staying in their camp and we're on roads,” he said. The mat system will be laid down from the main road to reach the drilling sites.

Gross said he expects drilling to take 10 to12 days per well. He is looking for gas at both prospects and there is production infrastructure at both Trading Bay and Beluga River. It's a “personalized drilling program with our own drilling rig,” Gross said. The program is using the environmentally friendly mat system for temporary roads and for the drilling pad, and it is using the top drive cased hole drilling program.

“Those are the three main ingredients,” Gross said. “The fourth one is we hope to be lucky enough to get gas.”

In addition to drilling with casing and using mats, the company will be logging the wells differently. Ehm said they won't be doing conventional mud logging, but remote mud logging, which doesn't require a crew on site. And after drilling is complete, wireline logging will be done with small tools, a method which doesn't require a wireline logging unit on site.

Wells at Trading Bay, Beluga

The first wells to be drilled are on the Iliamna prospect acreage, the four leases Pelican Hill farmed in from Unocal onshore at Trading Bay. The leases expire Jan 31, 2004, and Ehm told Petroleum News July 22 that the acreage will be unitized to extend the leases beyond January. Both Unocal and Shell have drilled on this acreage in the past, Unocal the 3 Bachatna Creek unit, plugged and abandoned at 2,870 feet in section 11, township 9 north, range 15 west, Seward Meridian, in January 1972, and Shell the 1 Kustatan Ridge, plugged and abandoned at 6,718 feet in section 19-T9N-R14W, SM, in September 1967.

This acreage is north of the Trading Bay production facility and the Cook Inlet gas pipeline runs through it.

The other prospect will be drilled on Mental Health Trust Land acreage west of the Beluga River gas field. The rig and equipment will be barged up to Beluga from Trading Bay.






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