A Kitchen Lights enigma
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The pieces of the puzzle are falling into place, but how much gas is there?
Alan Bailey Petroleum News
Furie Operating Alaska’s Spartan 151 jack-up drilling rig is safely moored at Port Graham for the winter, having completed another couple of exploration wells this year, seeking oil and gas in the Cook Inlet Kitchen Lights unit. And the company’s Kitchen Lights gas production platform is moving south to Seattle, to overwinter there, with Furie now planning to install the platform in the waters of the inlet in the spring of 2015.
But just what has the company found as a consequence of its Kitchen Lights drilling? To date the company has completed a total of five Kitchen Light wells and has announced a gas field development centered on one of these wells. The Kitchen Lights unit straddles the center of Cook Inlet, off the northern coast of the Kenai Peninsula.
Furie’s efforts to bring a Kitchen Lights gas field into production, coupled with some tantalizing announcements of discovered gas resources, have caused speculation over how much gas the company may be able to bring on line. And documents relating to the drilling of the first of the company’s Kitchen Lights wells have recently been released by the Alaska Oil and Gas Commission, adding a further piece to the incomplete puzzle of figuring out what Furie has discovered.
The sequence of Kitchen Lights wells has broadly followed the requirements spelled out in Furie’s exploration plan, filed with the Alaska Department of Natural Resources. That plan views the Kitchen Lights unit as four distinct exploration blocks: the southwest and central blocks in the more southerly part of the unit; the Corsair block in the central part of the unit and the northern block in the unit’s northeastern sector. The plan of exploration says that Furie must drill wells in several of those blocks.
Discovery announcement In the fall of 2011 Escopeta Oil Co., the company from which Furie was subsequently spun off, started its drilling campaign with the Kitchen Lights unit No. 1 well in the Corsair block, announcing on Nov. 4, 2011, that it had made a 3.5 trillion cubic feet of gas discovery. That announcement, which met with some skepticism, was followed in March 2012 by a more scaled down estimate of gas reserves of 750 billion cubic feet.
In 2011 Furie had suspended the drilling of the No. 1 well at a depth of 8,805 feet. And in the summer of 2012 Furie used its Spartan rig to re-enter the well, continuing the drilling to a depth of 15,298 feet. Later that year the company drilled the Kitchen Lights unit No. 2 well and a sidetrack to that well, while in the summer of 2013 the company drilled the No. 3 well to a vertical depth of 10,391 feet.
All three of these wells are in the Corsair block. However, later in 2013 Furie proceeded to follow the exploration plan requirements by starting the drilling of the Kitchen Lights No. 4 well, this time in the northern block. The company completed that well this summer and, also this year, drilled the No. 5 well in the central block. The company plans to drill a sixth well in 2015, with that well lying in the southwest block, the last of the blocks to be drilled.
Resource delineation? Although Furie has obviously drilled each of its wells in hopes of finding new hydrocarbon resources, the fact that the No. 1 and No. 3 wells are only about a quarter of a mile apart would seem to suggest that a purpose of the No. 3 well would have been the delineation of the discovery made in the No. 1 well. That conclusion appears confirmed by the fact that Furie’s planned development centers on the No. 3 well rather than the No. 1 well, the original discovery well.
In May 2012 Damon Kade, then president of Furie, told Petroleum News that the purpose of the No. 2 well was to further delineate the company’s gas find, in addition to seeking new resources.
In July 2013 Furie filed a formal statement of a gas discovery with the Alaska Department of Natural Resources. That statement documented a discovery made in the No. 3 well, saying that the well had encountered multiple productive gas pools in the Sterling and Beluga formations at depths ranging from 3,618 feet to 6,228 feet. The statement said that modular dynamic testing had been conducted on 28 gas pools and that six pools had been flow tested.
Furie has not announced any other results from its drilling.
Drilling records However, the recent publication by the Alaska Oil and Gas Conservation Commission of documents relating to the drilling of the Kitchen Lights unit No. 1 well shed a little more light on the situation, while falling short of providing data needed to assess the scale of Furie’s gas find.
These documents include a letter dated Dec. 21, 2011, to Alaska’s Division of Oil and Gas from Bruce Webb, now Furie’s vice president for government and regulatory affairs, stating that the intent had been to drill the No. 1 well to a depth of 16,500 feet. Webb’s letter explained that a series of drilling delays had prevented the completion of the No. 1 well in 2011, but that the company anticipated re-entering and completing the well in 2012. That re-entry was indeed accomplished.
Although not mentioned in Webb’s letter, other records from the drilling indicate that a 16,500-foot depth would place the bottom of the well in the mid-Jurassic, below the base of the Tertiary strata that host all of the current producing Cook Inlet oil and gas fields. A 2010 law passed by the Alaska state Legislature providing for a $25 million tax credit for the first company to drill into the pre-Tertiary of the Cook Inlet from a jack-up rig would have provided a strong incentive to drill into those Jurassic rocks.
Many tests The drilling reports from the Kitchen Lights unit No. 1 well confirm that Furie did indeed encounter gas during the 2011 drilling project, with records of substantial flows of gas into the well at various depths, and of modular dynamic testing of potential gas resources at multiple levels. A summary of the various modular dynamic tests indicates 18 tests at depths between 4,247 feet and 4,828 feet in the Sterling formation; 15 tests at depths between 5,047 feet and 7,392 feet in the Beluga formation; and one test at between 8,700 feet and 8,727 feet in the Tyonek formation.
The continued drilling of the No. 1 well in 2012 stopped more than 1,000 feet short of its original 16,500-foot target depth, with the bottom of the well reaching the deeper part of the Tertiary section, rather than the Jurassic. Drilling reports from the well suggest that the well only encountered minor quantities of gas below 8,805 feet. And there is no indication of an oil find. Furie did not conduct any tests on the portions of the No. 1 well drilled in 2012, the drilling documents state.
Substantial find The scale of the gas-field development that Furie is now engaged in, including the construction of an offshore platform and the laying of a subsea pipeline, implies that the company did make a substantial gas find with its Kitchen Lights No. 1 and No. 3 wells. The company’s plan of operations for its Kitchen Lights development says that its offshore platform will be centered on the No. 3 well, with an initial subsea gas line to shore capable of carrying up to 100 million cubic feet of gas per day. The plan includes the possibility of adding a second, twin pipeline, also with a 100 million-cubic-feet-per-day capacity. The plan of operations also says that development of the Kitchen Lights resource is expected to result in the production of up to 30 billion cubic feet of gas per year.
Meantime, further development at Kitchen Lights, and perhaps some further insights into the project, will need to wait for the melting of the sea ice in 2015, at the end of the coming winter.
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