Cook Inlet exploration activity heats up

May 26, 2013

Just three years ago Alaska’s Cook Inlet was considered by many to be a dry basin, with production in decline. Now two jack-up rigs are active exploring for oil and gas with many more planned.

This week Governor Sean Parnell signed the oil tax reform Senate Bill 21, the More Alaska Production Act, into law (photo).  This historic legislative package could very well move Alaska forward and spur new investment and production. The Bill eases the taxation burden for exploration and production companies.

In the Cook Inlet :

• Hilcorp Energy Company picked up 19 new leases, spending $2.6 million, nearly half of the high bids offered for 28 tracts sold at the State’s latest lease auction.  Hilcorp says it will be investing $300-$350 million this year to increase output at the fields. 
• Furie Operating Alaska and Buccaneer Energy are drilling in Cook Inlet now, close to existing production wells. Cook Inlet Energy LLC says it has contracted a rig to drill its Sword well adjacent to the company’s producing West McArthur River field.
• Aurora Gas LLC, has filed for permits to drill on the West side of Cook Inlet at Nicolai Creek, about 10 miles south of Tyonek. Aurora is another independent exploration and production company and has been in Cook Inlet since 2011.
• In 2010 the Donlin Gold decided to build a 315-mile, $834 million underground natural gas pipeline from Cook Inlet to supply energy for its massive $6.5 B gold mine in south-west Alaska.  This pipeline would run alongside the historic Iditarod Trail in several places. The proposed gas line is under regulatory review.

The State posts up to date maps of Cook Inlet drilling activity. See source e).

 

Commentary

The State of Alaska is trying to kick-start its energy exploration sector with a new taxation regime. Activity in the Cook Inlet in a the past three years has been a bright spot for Alaska’s oil and gas sector.

Sources

• a)Alaskanomics blog, dated 24-May-2013, "Energy Comeback" for Alaska Begins Now".



• b)http://www.alaskajournal.com/Alaska-Journal-of-Commerce/May-Issue-1-2013/Two-jack-up-rigs-now-back-at-work-drilling-in-Cook-Inlet/



• c)http://www.kbbi.org/content/hilcorp-aurora-outline-cook-inlet-drilling-plans



• d)http://www.groundtruthtrekking.org/Issues/MetalsMining/Donlin-Creek-gold-mine-prospect.html#ixzz2UPJDQ5p4



• e)http://dog.dnr.alaska.gov/GIS/Data/ActivityMaps/CookInlet/CI_OilandGasActivity_Final_20130503.pdf