Furie gears up for busy 2017, plans deep test for oil in Inlet

  • Furie Operating Alaska’s Julius R Platform, installed last year in Cook Inlet, is now producing more than 13 million cubic feet of natural gas for several Southcentral utilities. The company has busy drilling plans for 2017, including a search for untapped oil reserves. (Photo/Courtesy/ Furie Operating Alaska)

Furie Operating Alaska is gearing up for a busy season in Cook Inlet with plans to complete a gas production well drilled last year and drill two more wells including a deep test to assess potential oil resources in Jurassic-age rocks, according to Vice President Bruce Webb.

Furie is based in Houston but Alaska is its operating area. The company now produces about 13 million cubic feet to 14 million cubic feet from two wells on the company’s Julius R gas production platform in north Cook Inlet, KLU-3 and A-2, a production well drilled last year.

The company is now supplying gas to Homer Electric Association and Matanuska Electric Association, with other sales to ConocoPhillips and Aurora Gas. A contract to supply Enstar Natural Gas Co. begins in April 2018.

Webb said Furie’s first order of business this spring is to move a small workover rig to its platform to do some work on the KLU-3 well. As soon as the Inlet is clear of ice, the Randoph Yost jack-up rig will move out from winter storage at the OSK dock in Kenai to complete Furie’s A-1 well that was started last year but not finished.

Drilling and completion work on the A-2 well was finished, however.

Once the A-1 is done the jack-up rig will move to a new location to drill another gas production well, A-4, and then again to yet another location to tackle a deep test with the KLU-6 well, Webb said.

It is an ambitious schedule but doable, Webb said.

“There should be plenty of time to do this work if we can be out there (with the jack-up rig) by the end of May. That will give us five months to drill, until October,” he said.

On the deep KLU-6 test, “We want to have enough time after drilling to adequately log the well, run casing, and possibly flow test,” Webb said.

The Jurassic test will be 20,000 foot-plus test, which will be expensive.

“However, we see a large oil potential there. We know there is gas, based on our earlier drilling of the KLU-2 well,” Webb said.

There have been wells drilled into the Jurassic-age formations in the Inlet before. Unocal Corp. drilled two deep wells in Granite Point many years ago and found oil, but technical problems with the wells impeded their use as commercial producers.

The Jurassic is considered an essentially untested oil target in the Inlet, and geologists believe much of the oil found in the known, shallower conventional traps originated there.

Dan Seamount, a member of the Alaska Oil and Gas Conservation Commission, said Cook Inlet has produced 1.3 billion barrels since production began in the region in 1958, and U.S. Geological Survey studies show there could still be 34 billion barrels of oil-in-place in the Inlet’s deep source rocks, mainly the Jurassic.

“There are billions of barrels of oil that are unaccounted, and many of us believe it’s still down there,” said Seamount, who said he spoke from his experience as a geologist and for the commission, which is a regulatory body.

“We’ve barely skimmed the surface,” of the Inlet’s potential, he said. “We’ve only tapped some of the oil that was trapped in the shallow conventional traps.”

Seamount blames industry for being “too risk averse” in the Inlet because of the costs and uncertainties of drilling deeper, as well as the state for not pushing companies to be more aggressive.

If Furie makes a new discovery at KLU-6, Webb said a new platform will be needed because the area is too far to serve from Furie’s current platform. A new pipeline to shore will be needed too, added to the 10-inch pipeline Furie has now installed.

Furie now employs about 16 people in its Alaska operations and four people in Lousiana, who work on engineering, procurement and logistics support.

Furie’s success in developing its Kitchen Lights Unit is a vindication of a vision by Danny Davis, the company’s founder, who believed there were undiscovered resources in Cook Inlet at the time when many in the industry felt the Inlet’s potential was exhausted.

Davis led an effort to get a jack-up rig to Alaska that ultimately resulted in the Spartan 151 jack-up rig being brought north from the Gulf of Mexico. Furie used the Spartan rig in its initial drilling and then brought in the larger Randolph Yost jack-up rig from Asia last year, which was suited better for the work Furie had planned.

Another jack-up rig, the Endeavour, was brought to Alaska by Buccaneer Energy for exploration but left when that company, an independent based in Australia, filed bankruptcy. It is now working in Africa.

The Spartan 151 is still in Alaska waters, meanwhile. It is stored in Seward in anticipation of work for independents Houston-based BlueCrest Energy or Glacier Oil and Gas, formerly Cook Inlet Energy.

Furie’s founder Davis, meanwhile, no longer heads the company but still holds a working interest in Kitchen Lights and actively monitors operations.

“He’s not shy about telling us what he thinks needs to be done,” Webb said.

In other production news, AIX Energy LLC continues to produce from two wells in its small onshore Kenai Loop field and is studying the possibility of putting a third well into production, according to latest plan of development filed by AIX with the state Division of Oil and Gas.

Four wells have been drilled in Kenai Loop with two in production, KL-1 and KL-3. KL-3 is completed as a producing well but is currently not producing or tied in to the production system. KL-2 is drilled but currently suspended, and may be used as a future utility or disposal well.

AIX is also studying the adding of compression at Kenai Loop to meet contractual sales requirements and to maximize recovery, the company said in its development report filed with the state.

Kenai Loop was originally discovered and developed by Buccaneer Energy with the first gas production well completed in May, 2011. Additional drilling and seismic work was done over the next three years, with AIX acquiring the property and becoming field operator in late 2014, after Buccaneer filed bankruptcy.

Tim Bradner is co-publisher of Alaska Legislative Digest and a contributor to the Journal of Commerce. He can be reached at [email protected].

03/22/2017 - 12:20pm