Barron gives Escopeta thumbs-up to drill down

In an Oct. 13 letter to Escopeta Oil Co., Division of Oil and Gas Director Bill Barron said the independent could resume drilling its upper Cook Inlet well after the integrity of the offshore well’s newly set 13 and 3/8-inch casing and its blowout preventer equipment had been successfully tested. Both tests will be observed by an inspector from the Alaska Oil and Gas Conservation Commission.

Barron said Escopeta must also remain in compliance with all other state and federal agencies, including continuing to conduct drilling operations based on the plan approved by AOGCC.

AOGCC Commissioner Cathy Foerster told Petroleum News Oct. 20 that weekly blowout preventer tests are required on the offshore Cook Inlet exploratory well, with an agency inspector on hand for each of them.

So far Escopeta’s equipment has passed muster, she said.

“We’re keeping a close eye on them, helping them stay in compliance.”

The KLU No. 1 well is being drilled by the Spartan 151 jack-up rig in the Corsair prospect, which is one of four oil and gas prospects in the Escopeta-operated, 83,394-acre Kitchen Lights unit.

Escopeta Strategic Officer Steve Sutherlin said drillers had reached a depth of 4,933 feet, the approximate depth at which Barron had asked the company in a Sept. 2 letter to temporarily stop work in order to evaluate and determine “the reasonableness and prudence of moving forward with additional drilling.” The request was made at Escopeta’s suggestion.

Factors in Barron’s review included weather and ice formation in the inlet. He could have suspended drilling until spring, which he didn’t do, but he did remind Escopeta that drilling into hydrocarbon formations had to stop Oct. 31, per condition 7 of the company’s Oil Discharge Prevention and Contingency Plan. The C-plan was approved in June by the Alaska Department of Environmental Conservation.

Barron had said in September that the arrival of the Spartan 151 jack-up in Cook Inlet was welcome news, but “a well control incident in Cook Inlet could have devastating consequences for the state and the state’s most vital industry.”

Drilling into gas bearing formations

“We may be drilling down again as early as Sunday.

“Escopeta then will drill on into gas-bearing formations,” he said.

On Oct. 12 Sutherlin said, “The company’s key strategy for 2011 is to learn as much as possible about the natural gas bearing structures in the Corsair prospect, with an eye on expediting gas production. We think that Cook Inlet exploration, in concert with efforts such as Enstar’s new gas storage facility, can avert a crippling gas supply shortage in the region.”

“We’ve been very pleased with our drilling performance so far,” he said Oct. 19. “If recent results are any indication we can expect a rapid rate of penetration going forward.

“Safety and best oil field practices for Cook Inlet will guide any decisions. Escopeta will continue to communicate, coordinate and cooperate with all state and federal agencies to meet its drilling commitments,” Sutherlin said, declining to predict whether or not Escopeta would reach full depth of 16,000 feet, into the Jurassic formation, by Oct. 31.

Oct. 31 is also the deadline for Escopeta to have reached the Jurassic formation in order to comply with a Division of Oil and Gas-approved plan of operations for the Kitchen Lights unit. Failure to meet the deadline could conceivably mean the loss of the unit and most of its leases.

In the event Escopeta does not reach the Jurassic by Oct. 31, Sutherlin said the company was operating on the assumption that it and the division would come to an agreement, “putting safety before economic considerations.”

—Kay Cashman

Editor’s note: Steve Sutherlin is a former Petroleum News reporter and a minority member of the limited liability corporation that owns the newspaper.