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Cook Inlet Energy requests lease expansion Company wants acreage added to Mental Health Trust lease on west side near Tyonek, proposes drilling 2 wells over next 2 years Eric Lidji For Petroleum News
Cook Inlet Energy plans to drill two wells on the west side of Cook Inlet by the end of 2013 in exchange for the Alaska Mental Health Trust expanding a lease in the area.
The independent is asking the Trust Land Office to add some 1,660 acres to lease MHT 9300063, on “highly prospective” land around 10 miles north of the village of Tyonek.
The proposed expansion area covers a portion of two tracts. The Division of Oil and Gas originally leased the acreage as ADL 391126 before conveying it to the Trust.
Apache Corp. held the lease until it expired at the end of September. Cook Inlet Energy holds state and Mental Health Trust leases on either side of the proposed expansion. The MHT 9300063 lease is scheduled to reach the end of its primary term on Dec. 30, as is another Trust lease, MHT 9300062, on the other side of the expansion acreage. The state leases Cook Inlet Energy holds in the area are scheduled to expire in February 2018.
No previous development There has not been any previous development on the acreage, according to the Trust, but the acreage is just west of the Beluga River and the Pretty Creek units and just north of the Lone Creek and the former Three Mile Creek units. Some exploration in the vicinity includes a recent Linc Energy Inc. stratigraphic test for deep coal deposits, the N. Beluga No. 1 well that Pelican Hill drilled in late 2004 (finding “a reservoir, but no gas,” Arlen Ehm told Petroleum News at the time) and the Burglin X33-12 well from 1976-1977.
Under its proposal, Cook Inlet Energy would lease the additional acreage through the end of 2013 for $3 per acre per year, a bonus payment of $25,730 and 12.5 percent royalty.
In return for the expansion, the company has committed to drill an exploration well on one lease by the end of 2012 and a second exploration well on the other lease by the end of 2013. Cook Inlet Energy would lose one of the two leases if it failed to drill the first well and would pay the Trust a $250,000 penalty if it failed to drill the second well.
The Trust is taking comments on the proposal through Dec. 20.
—A copyrighted oil and gas lease map from Mapmakers Alaska was a research tool used in preparing this story.
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