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State skeptical about claim of huge Inlet gas discovery

Richard Mauer

Two state officials said Monday they are skeptical of Escopeta Oil's claim last week that it made a giant gas discovery in Cook Inlet, saying the company lacks the data to back its assertion.

"It's possible their numbers are good. It's possible their numbers are bad," said Cathy Foerster, one of three members of the Alaska Oil and Gas Conservation Commission. "In fact, we think making an announcement of this kind, with so little firm data, is irresponsible."

Bill Barron, director of the state's Division of Oil and Gas and Escopeta's landlord for its Cook Inlet leases, said the state was being "cautious."

"They have made a bold claim and right now the division can't substantiate either way, positive or negative," Barron said. "It definitely is an encouraging sign but they're going to need several more wells to prove up what the true potential is."

On Friday, after government offices closed for the day, Escopeta announced it had made a stunning find while drilling the first well in the Kitchen Lights Unit of Cook Inlet, about 10 miles north of Nikiski: an estimated 3.5 trillion cubic feet of natural gas in two geologic formations. Escopeta said it was suspending drilling for the winter with the well half finished. It hopes to resume next year, when it would encounter three or four additional potential oil and gas formations, which could add to their reserves.

The North Slope, with its vast reserves, is thought to have 35 trillion cubic feet of recoverable gas, though experts say a lot more will be discovered if a gas pipeline is built and gas production becomes commercially viable.

Houston-based Escopeta is an independent petroleum company, the kind of producer that state officials have been trying to woo to replace the waning interest of the major companies in Alaska's aging oil fields.

Bruce Webb, the Escopeta vice president who issued the announcement last week, said Monday that the company isn't claiming it can recover all the gas it found. But he insisted it had confirmation from an independent company that studied its well logs.

"With the advent of all the new technology and fracking (hydraulic fracturing to free trapped gas), it should be a pretty high recovery rate," Webb said.

He said the company plans to finish the first well and drill another next summer. It's considering leasing or buying another rig to speed up its plans to drill a total of five wells in the Kitchen Lights Unit.

Foerster, the petroleum engineer member on the Alaska Oil and Gas Conservation Commission, said the industry has three generally accepted methods for estimating the size of reserves. The best is to drill another well to determine the extent of the field. Next best is to produce gas for a while to see how long it takes for pressures in the well to decline, then to shut down the well to see how fast pressure rebuilds. The least best method is using three-dimensional seismic exploration techniques, she said.

Escopeta has done none of that, Foerster said.

"They have old 2-D data," she said. "Without even testing the zones, how do they know?"

Barron said the geology of Cook Inlet is unusually complex, with water-carried sand and silt deposited in varying-sized formations that are interspersed with numerous faults.

Reach Richard Mauer at rmauer@adn.com or 257-4345.


By RICHARD MAUER
Anchorage Daily News