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North Fork plan of development approved
Glacier asks for delay in scheduled contraction to allow new owner, Gardes Holdings, to assess opportunities once state OKs transfe Kristen Nelson Petroleum News
A Feb. 25 decision, signed by Alaska Division of Oil and Gas Director Tom Stokes, approved the 56th plan of development for the North Fork unit submitted by Cook Inlet Energy, a Glacier Oil & Gas Corp. company.
Glacier sold North Fork to Gardes Holdings Inc. in November (see story in Nov. 15 issue of Petroleum News), and the division has received notification from Cook Inlet Energy resigning as operator of the unit and appointing Gardes Holdings as the successor operator and a lease assignment application from CIE to Gardes for the state oil and gas leases associated with the unit.
The division said both notification and assignment are under review and will be addressed separately.
Vision Resources, a Gardes company, has signed a gas supply contract with Alaska Pipeline Co. which is before the Regulatory Commission of Alaska for approval (see story in this issue).
Contraction delay request On Feb. 26 Glacier requested that the division delay contraction of the unit acreage at North Fork.
David Pascal, chief operating officer of Cook Inlet Energy, said the company is requesting the delay “in the scheduled contraction of the North Fork Unit” because the company is in the process of transferring North Fork unit ownership to Gardes Holdings “and this process is still under review and awaiting final approval from the Division of Oil and Gas.”
Unit contraction is required after a unit has been in production for 10 years, at which point the unit is contracted to areas actually in production. Participating areas are required to be established for producing areas before sustained production can begin.
North Fork has just a single PA.
Pascal said CIE is requesting a one-year suspension in the contraction “to allow Gardes the opportunity to access options as a new operator and submit its own development plan to DO&G.”
Unit formed in 1965 The division reviewed the history of the unit in the 56th POD approval decision.
It was formed as a federal unit in 1965 with Standard Oil Company of California as operator. The U.S. Department of the Interior’s Bureau of Land Management and the state co-managed the original unit, which included two state and two federal leases, a total of 58,113.4 acres. In 2006 BLM waived its administrative rights and transferred the North Fork leases to the state.
The unit currently includes five state leases, a total of 2,601.84 acres, the division said.
The unit’s single participating area, the Gas Pool No. 1 PA, was established in 1965 covering 640 acres. In 2011 it was expanded to 800 acres, the same year in which sustained production was achieved.
Through the end of 2020, North Fork had cumulative production of 21.46 billion cubic feet of natural gas and 27,414 barrels of water, all from the original PA.
In 2014, CIE took over as operator at North Fork from Armstrong Cook Inlet.
Work at North Fork The division said CIE completed some of the work proposed in its 55th POD. It added perforations to one of the wells in the field, and although the COVID-19 pandemic forced suspension of that work, CIE did accomplish modification of compression capabilities “to assist in extending the life of the wells” and used offsite disposal to assist in controlling water production, as well as identifying equipment and resources necessary to decrease system pressure at the facility.
April through December 2020, North Fork production totaled 0.92 billion cubic feet, compared to 1.02 bcf for the same period in 2019.
For the proposed 56th POD, “CIE has no specific plans for exploration or delineation,” the division said, but will continue to evaluate opportunities to drill outside the existing PA, as well as “analyzing and optimizing” current production from the unit.
As with the 55th POD, the company said “additional drilling will depend on favorable economic conditions including the negotiation of a long-term gas sales contract.”
The division approved the proposed 56th POD and said the plan protects the public interest “by maintaining and optimizing current production while evaluating future drilling opportunities.”
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