Sponsored Content - Furie installed the first platform in the Cook Inlet in over 20 years and became the newest gas producer in the Inlet. Their new plan of operations called for drilling more development wells to fulfill the gas contracts, but also 10 exploratory wells to be drilled concurrently. Furie had already drilled the KLU#4 to 10,000’ in the North Block but had to temporarily leave the well because of ice build-up in the Inlet. They left the well in such a way that they could easily re-enter and finish drilling to approximately 17,000’ TD in the future. The new plans called for finishing this well and drilling the KLU#9 and KLU#12 in the North Block. Each of these wells had permits and letters of non-objection from the various state and federal agencies. To ease this process they contracted the larger, more powerful Randolf-Yost rig that would also be capable of drilling and testing the Jurassic at approximately 22,000’.

Furie Operating Alaska LLC became the newest producer in Alaska in late November 2015, when natural gas production started from the offshore Kitchen Lights unit.

But given that the unit is the largest in the Cook Inlet region, exploration activities will remain a priority even as development drilling progresses, according to the company.

In a plan of operations submitted to the state in March 2016, the company proposed a schedule for drilling as many as 10 exploration wells at the unit in the next five years.

The program would come on top of existing plans for development drilling.

To support the exploration program, Furie contracted the Randolf Yost jack-up drilling rig, which completed the trip from Singapore to Kachemak Bay in Alaska in March.

The exploration program is a vast expansion over previous proposals.

Previously, Furie planned to complete a second development well in 2016, which would allow the company to meet supply commitments should anything happen to the existing KLU No. 3 well. The company said it would complete a third well in 2017 and a fourth well in 2018, when many of the largest existing supply contracts in the region expire.

As far as exploration, Furie had planned to re-enter and deepen the KLU No. 4 well this year and drill a new well in 2017, according to senior vice president Bruce Webb.

Under the new plan, Furie would first re-enter the KLU No. 4 well and then drill two additional exploration wells each year over the next five years. The KLU No. 4 project would target oil and natural gas in the Tyonek, Hemlock, and deeper Jurassic formation.

The other wells would be spread across the entire unit and target numerous formations.

Previous Work

After the Houston-based independent Escopeta Oil & Gas Co. spent more than a decade arranging an exploration program in the upper Cook Inlet, a 2009 settlement agreement between the state and various independent operators created the Kitchen Lights unit.

The 83,394-acre unit combined 40,733 acres from the Escopeta-operated Kitchen unit, 15,930 acres from the Renaissance Alaska LLC-operated Northern Lights prospect and 26,721 acres from the Corsair prospect that had previously been owned by the bankrupt Pacific Energy Resources Ltd. The settlement prevented a legal battle over missed work commitments while simultaneously prompting exploration and development activities.

A corporate shuffle in 2011 divided the Kitchen Lights unit. Through its subsidiary Furie Operating Alaska LLC, the German company Deutsche Oil & Gas became the new unit operator. Cornucopia Oil and Gas Co. became the primary working interest owner.

Given the patchwork nature of the unit, the state required the operator to spread its exploration activities across four blocks: North, Corsair, Central, and Southwest.

The five exploration wells to date have favored the Corsair block.

Furie drilled the 15,298-foot KLU No. 1 well in 2011 and 2012, the KLU No. 2 and KNLU No. 2-A sidetrack in 2012, and the 10,391-foot KLU No. 3 well in 2013. All three wells were drilled in the Corsair block and formed the basis for a development program.

Toward the end of the 2013 open-water season, after completing KLU No. 3, Furie began drilling KLU No. 4 well in the northern block. In 2014, the company completed KLU No. 4 and completed the 11,800-foot Kitchen Lights Unit No. 5 well in the central block.

KLU No. 5 was a dry hole, but KLU No. 4 “encountered potential oil and gas reserves,” according to the company. In a plan of development from October 2015, the company proposed deepening KLU No. 4 to penetrate the Sunfish Channel of the lower Tyonek formation.

“We’ve invested $700 million in the state of Alaska over the last five years,” chief financial officer David Elder told the House Resources Committee in March 2016, in testimony to preserve tax credits. “Depending on where the tax credits stay, we’ve got a planned additional $300 million investment to make over the next two to three years.”

New Plans

The more recent proposal calls for drilling KLU No. 4 between May 2016 and October 2017. A target depth of 17,858 feet would reach the deeper Tertiary rock sequence.

Previously, Furie discussed a KLU No. 6 well targeting the southwest block, which would complete the circuit of exploration activities required to target each of the four exploration blocks. But the company had said that a final decision would depend on the results of a 3-D seismic survey Furie commissioned in 2015, according to Webb.

The updated plan calls for drilling the KLU No. 9 and KLU No. 12 wells at the northern end of the unit in the 2017 season, the KLU Osprey and KLU Deep Jurassic wells in the 2018 season, the KLU No. 10 and KLU No. 11 wells in the 2019 season, the KLU No. 6 and KLU No. 8 wells in the 2020 season and the KLU No. 7 well in the 2021 season.

The progression of the wells moves southward over the five-year program.

The wells also vary in depth. The KLU No. 9 and KLU No. 12 wells would be approximately 17,000 feet deep. The KLU Osprey well would be approximately 7,230 feet deep. The KLU Deep Jurassic well would be approximately 24,000 feet deep.

Those wells would allow Furie to retain the vast acreage within the unit boundaries but outside the existing development. The development only accounts for about 300 acres, which leaves more than 83,000 acres at stake in the current exploration campaign.

A Second Jack-Up

To date, Furie has relied on the Spartan 151 jack-up rig for conducting drilling operations in the region. Going forward, the company is using Shelf Drilling’s Randolf Yost rig.

The Randolf Yost rig is bigger and more powerful than the Spartan 151 and can more easily be cantilevered over the Julius R platform for development drilling, according to Webb. The larger rig will allow the company to eliminate costly supply runs by accommodating more materials on site. It will also allow the company to target potential oil accumulations below the Tertiary strata, where most Cook Inlet fields are located.

The decision creates the potential for Cook Inlet to once again have two jack-up rigs in operation, which had been the case until the Endeavour rig departed for foreign waters.

BlueCrest Energy Inc. has expressed an interest in using the Spartan 151 rig for conducting a gas development program at its Cosmopolitan field. As of early 2016, the company was waiting for greater political certainty before making a final decision.

Read Part 1: Crude Discovery Gets New Life 27 Years Later

Read Part 2: The History of ProAK’s Cook Inlet Energy Fields

Read Part 3: Furie Seeks Permit for New Platform