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CIE eyes possible Sabre well partners Anchorage-based company closes deal for rig to drill prospect near West McArthur River oil field; Sword well produces 600 bopd Wesley Loy For Petroleum News
Cook Inlet Energy LLC says “several potential joint venture partners” have expressed interest in its planned Sabre well.
The Sabre prospect is near the company’s producing West McArthur River oil field on the inlet’s west side.
Anchorage-based Cook Inlet Energy is a subsidiary of Miller Energy Resources Inc., a publicly traded Tennessee company.
On May 5, the company exercised an option to buy a rig to drill the Sabre prospect, a filing with the U.S. Securities and Exchange Commission said.
The purchase price was $3.25 million. The seller was Baker Process Inc., a subsidiary of oilfield services giant Baker Hughes.
The plan now is to retrofit the rig to meet the requirements for drilling Sabre, an April 29 operational update said.
Rig drilled geothermal well The rig is a National 1320 model that formerly belonged to Naknek Electric Association, a small rural cooperative in the Bristol Bay region of Southwest Alaska. The co-op used the rig to drill a failed geothermal well. Subsequently, as part of its bankruptcy case, the co-op sold the rig to Baker in 2012.
The rig improvements are planned to take place over a four-month period in Cook Inlet Energy’s Nikiski yard.
“The estimated total acquisition and building cost for the new rig is expected to be $10 million,” the April 29 update said. “The company expects that the rig will pay for itself within 16 months of activity, making the purchase more attractive than a lease of the same unit.”
The newly acquired rig will be called rig 36, the company said.
Sword produces Cook Inlet Energy in 2013 drilled a precursor to Sabre called the Sword No. 1.
The company hired Patterson-UTI Drilling Co.’s rig 191 to drill Sword, which reached a final measured depth of 18,475 feet.
The Sword well penetrates three zones, but has produced solely from the Hemlock zone with a recent flow rate of about 600 barrels of oil per day, the company said.
“The two additional zones are expected to add significantly to the Hemlock production,” the update said.
A second zone in the Sword well, the Tyonek G, recently tested at about 290 bopd with a 6 percent water cut, the company said. The zone subsequently was isolated pending a test of the third and final zone.
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