Furie asks DOG for corrections to Kitchen Lights plan approval

Furie Operating Alaska has written to Chantal Walsh, director of Alaska’s Division of Oil and Gas, requesting corrections to what the company characterizes as factual errors in an approval notice the division issued for the new plan of development for Furie’s Kitchen Lights unit. The unit includes Furie’s producing Kitchen Lights gas field.

Furie says that the approval document incorrectly states that, although Furie has since 2015 committed to drilling two wells in the unit, the company has consistently failed to drill the wells. As previously reported in Petroleum News, the division has issued a notice of default to Furie but has said that Furie can cure the default by meeting drilling commitments in the new Kitchen Lights plan.

Failure to cure the default could result in unit contraction or termination.

Furie told Walsh that the division document incorrectly states that Furie’s work commitments for 2018 are the same as those for 2015, while also incorrectly saying that Furie did not drill any wells in 2016. In fact, the division had approved the deferral of Furie’s planned 2015 drilling into 2016 and the company actually drilled three wells in 2016, one more well than required in the approved Kitchen Lights plan. The three wells drilled in 2016 consisted of the KLU No. A2-A, that is now producing gas, the KLU No. A1 well, and the KLU No. A2 well, Furie says. The KLU No. A1 well was drilled into productive zones but has not yet been completed, the company says.

Furie did not drill in 2017 - the company has said that the failure by the state to pay tax credits owed to the company, coupled with financial uncertainty associated with state budget negotiations, had compromised the funding for the drilling.

Furie also objects to statements in the division’s plan authorization, implying that the company is not actively exploring and developing the Kitchen Lights unit. The company, in its letter to Walsh, lists its exploration and development accomplishments in the Kitchen Lights unit since 2011.

“Furie’s track record shows diligent exploration and development of the KLU as a reasonably prudent operator,” Furie’s letter says.

- ALAN BAILEY