|
Evergreen’s Alaska wells not commercial Mark Sexton says company will go slow in Alaska until state develops new regulations for shallow gas drilling Kristen Nelson Petroleum News Editor-in-Chief
Evergreen Resources will be slowing down a bit in Alaska, but is not discouraged, either by its initial Cook Inlet basin results or by a state hold on issuing shallow gas leases while regulations are developed.
Denver, Colo.-based Evergreen Resources said in an Oct. 29 statement that it completed five of its eight coalbed methane pilot wells in the Pioneer unit in Alaska’s Cook Inlet basin early in the second quarter, but “initial production results indicate that the wells in the first two pilot projects are probably not capable of commercial production.” Not down on Alaska The company is planning to continue work in Alaska.
“While we’re disappointed with our initial drilling results on the Pioneer unit,” Mark Sexton, Evergreen’s president, chief executive officer and chairman, told an Oct. 30 conference call, “… we’re not down on the Alaska project.”
The company is slowing down a little, he said, but is “very encouraged by the potential of the additional 230,000 acres of leases that we recently acquired in the Matanuska-Susitna valley.” Back to the original play concept Evergreen applied for the 230,000 acres of shallow gas leases in February 2000, Sexton said.
“We would have drilled there first, in that area — and this is the original play concept for Evergreen — but it took us three and a half years to get the leases.” In fact those leases were only issued recently, after Evergreen stepped in and negotiated a settlement in a lawsuit between the state of Alaska and early applicants for some of the leases in the state’s first shallow gas lease offering.
Sexton said that Evergreen was “working on the play concept” for the area of its shallow gas lease applications, when, in May 2001, “we had the opportunity to acquire the Pioneer unit, and we decided to take a shot at it.” The pilot wells were drilled in the Pioneer unit.
The five stratigraphic core holes the company has planned are on the original play concept, he said.
“We’re going to test it very diligently with core holes.” North of Castle Mountain fault That original play concept, he said, is north of the Castle Mountain fault. “The coals that we would encounter at 3,700 feet on the south side of the fault in the Pioneer unit, we would encounter at 700 feet (north of the fault) and it will be a whole other series of coals that, quite honestly, we thought were more attractive.”
Sexton said he didn’t really see a problem with the hold the state put on issuing shallow gas leases until new regulations are put in place.
Citizens in the area “believe there wasn’t enough time for them to respond to this new shallow gas leasing program,” he said, so the state “has simply decided to go a little slower on new leasing and is going to make sure that everyone has adequate time to comment.” No problem with state’s moratorium The five core holes will provide “scientific data that we and the government and the citizens in the area are going to want to see,” he said. And by the time Evergreen is ready to go ahead, he said, “I think all the rules and regs will be in place that people are looking for.
“I don’t really see a problem.
“But it’s part of the reason why we’re going a little slower next year in Alaska, to give everybody a chance to get comfortable with it and see what this really is, and what it’s going to look like.”
Evergreen has not yet determined that the project is economic.
Sexton said he believes people are “going to be very pleased with the results, if it’s economic.”
| 