Independents look at drilling in Cook Inlet

OIL, GAS: Company rents one rig and is looking at two more for work on leases.

April 18, 2011 

KENAI-- Another independent oil and gas company is putting drilling rigs to work in Cook Inlet.

After receiving state approval last month to work on shut-in wells, Cook Inlet Energy has rented a rig from Cudd Energy. The company has two more rigs in the works.

Buccaneer Energy Ltd. and Escopeta Oil and Gas Co. have also made drilling plans in the Inlet.

Cook Inlet Energy founder and chief executive David Hall told the Peninsula Clarion the rented rig is working near the Osprey Platform, an offshore development near the west side of Cook Inlet.

"I think Osprey has some of the biggest nuggets, as I call it, or reserves," Hall said.

Cook Inlet purchased Osprey's assets. Hall said it should take less than two months to get the three Osprey wells back in action.

"We're excited," he said. "We spent a lot of money getting where we are today."

Cook Inlet Energy's plans do not stop at Osprey. A rig that the company owns is on the west side of the Inlet, at the West McArthur River unit. It is being winterized and probably be put to work drilling for gas wells as early as this summer.

The company also is making plans that would require renting or buying a bigger rig for wells that require more technical work to bring online.

Hall said the company's preference is to buy a rig that works for both-on and offshore development.

The company is looking at rigs that cost $20 million-$24 million, Hall said.

Cook Inlet has more than 500,000 acres in oil and gas leases and exploration licenses and about 40 miles of pipeline, including some offshore.

"We've got a tremendous arsenal bank of facilities," Hall said.

Cook Inlet, a subsidiary of Tennessee-based Miller Energy Resources, bought much of its acreage from the state in 2009 after it was abandoned by Pacific Energy, Hall said.

Since then, it has worked to bring various wells back online.

The company mostly produces oil in the West McArthur River unit. It also has a share in the Three-Mile Creek Field, operated by Aurora, which produces natural gas. The company uses that gas for its own operations but plans someday to produce enough to sell some.

The state's tax incentives helped make that development feasible. "They are needed," Hall said. "It is extremely expensive to not only drill wells in Alaska but to operate."

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