THE EXPLORERS 2005: Alliance still plans to drill at North Fork

The company needs to drill a second well at the unit to prove sufficient reserves for Homer gas supply

Alan Bailey

Petroleum News

Harry Foote, vice president of Alliance Energy, has told Petroleum News that the company plans to drill a second well in the North Fork unit in the southern Kenai Peninsula in 2006, perhaps as early as in the spring.

Standard Oil of California originally discovered gas at North Fork when it drilled the 41-35 well in the unit in 1965, when searching for oil in the area. But gas has never been produced from the unit.

Gas-Pro Alaska LLC acquired the unit from Unocal in 1996 and NorthStar Energy, sister company to Alliance Energy, bought Gas-Pro in 2000. In 2001 NorthStar tested the 41-35 well and reported a flow of 4 million cubic feet per day of natural gas from one interval at 8,500 feet.

In 2003 NorthStar struck a deal with Enstar Natural Gas Co. to supply gas from North Fork to the town of Homer. The deal involved Alliance Energy building a pipeline from North Fork to Anchor Point and Enstar building a pipeline from Anchor Point to Homer. However, both Enstar and the Regulatory Commission of Alaska required that pipeline construction be contingent on drilling a second North Fork well, to raise proved reserves in the field from 12 billion cubic feet to 14.5 bcf and to ensure a 20-year gas supply for Homer.

In August 2004 Alliance Energy announced that it would fully fund development of the North Fork Unit, including “fast-tracking” a pipeline north to connect the gas field with the Kenai Kachemak Pipeline. Under a farmout agreement between Alliance and NorthStar, development of the North Fork field would include drilling a second well, No. 41-36, “as soon as January 2005,” Foote told Petroleum News in 2004.

The second well has not yet been drilled but Alliance Energy still hopes to move ahead with the project.

“We’d like to get it into production next year and see Enstar get their pipeline in and start providing gas for the southern Kenai,” Foote said in September 2005.

And as a precursor to the drilling, Foote said that the company was going to do some further testing to a deeper horizon in the 41-35 well in the fall of 2005.

“We are actually going to a lower Tyonek sand that we think may be a very extensive sand,” Foote said. “We’re going to reperf it and check it out because we think it might be a substantial thing.

“It will also help us a we get prepared to drill our new well that will be on the North Fork unit.”