|
Furie plans up to 2 wells at KLU; access to jack-up limiting factor
Kristen Nelson Petroleum News
Furie Operating Alaska has its new well, a sidetrack, online at the Kitchen Lights unit in Cook Inlet, Mark Slaughter, the company's chief commercial officer, told the Alaska Senate's Resources Committee Jan. 22, with up to two more wells planned at Kitchen Lights this year.
(See chart in the online issue PDF)
The Kitchen Lights Unit A-1A, part of the company's 2024 plan of development, began with geologic and geophysical work, followed by engineering and well design in 2023, with long lead-time items ordered by January 2024, followed by contractor and vendor procurement and contracting from February to September of 2024.
The well was drilled using the 151 jack-up rig.
When Furie began negotiations to use the rig in January 2024 it met with both Hilcorp Alaska and Enterprise, which owned the rig at that time. Hilcorp announced its purchase of the 151 jack-up in June 2024, and on Sept. 16 Furie and Hilcorp's jack-up rig company signed a drilling contract, with the jack-up mobilized to Furie's Julius R Platform on Oct. 3. An existing well, KLU A-1, was abandoned, and the A-1A sidetrack drilled. The well came online Dec. 16, Furie presentation materials show.
Alaska Oil and Gas Conservation Commission data show the KLU A-1 was a shut-in gas producer. The KLU A-1A sidetrack was permitted Sept. 13 and completed Nov. 2. December production data, the most recent available from AOGCC, show the KLU A-1A produced for 16 days in that month, with Kitchen Lights production averaging 11,928 thousand cubic feet per day in December, up 35.7% from a November average of 8,792 mcf per day.
A slide from the presentation shows Kitchen Lights gas production from Decembre 2023, more than 8,000 mcf per day, increasing to more than 12,000 mcf per day in January and February of 2024. That increase, Slaughter said, came at the request of Enstar, the Southcentral gas utility, for an increase in production in advance of a cold weather snap. That increase was followed by what Slaughter said was a natural decline, to some 8,000 mcf per day in December, before the increase in January to 14,000 mcf per day, as the new sidetrack came online and additional sands were perforated.
Furie issues Furie faces a number of issues in addition to jack-up rig access and uncertainties including the potential of North Slope natural gas coming to Southcentral.
One issue the company has addressed is the royalty rate it pays on its Kitchen Light leases, with hefty overriding royalties to previous owners in addition to the state's royalties.
Slaughter said Furie failed to get overriding royalty interest owners to reduce those royalties.
The company worked with the Alaska Department of Natural Resources on a royalty modification after a royalty modification bill passed by the House last year failed to pass the Senate. In September, Furie applied to DNR for royalty reduction, resulting in a preliminary best interest finding issued Dec. 6. Slaughter said the company awaits a final decision and expects it soon, as the public comment period on the preliminary finding closed Jan. 6.
HEX Cook Inlet, Furie's parent company, received financing from the Alaska Industrial Development and Export Authority for the purchase of the company, a $7.5 million loan it paid off in full and early on Oct. 25, 2023.
HEX then began negotiations with AIDEA and on Oct. 23, 2024, the AIDEA board approved a $50 million revolving line of credit, with a commitment letter and term sheet for that revolving line of credit signed by HEX and AIDEA Jan. 10.
2025 plans Slaughter said Furie is committed in its plan of development to drill one well at Kitchen Lights in 2025 and wants to drill a second well, both infield development drilling, with the second well subject to jack-up rig availability. That drilling would mean new gas to market in the fall of the year, he said.
Furie is also working to modify the Julius R Platform, which currently has space for six wells, to accommodate 12 wells, with engineering and permitting underway to increase the well count on the platform.
Slaughter said that in addition to the Kitchen Lights unit, held by Furie, HEX holds other Cook Inlet acreage and at some point exploration drilling could take place there. A DNR Division of Oil and Gas map of lease holdings shows the HEX leases on and adjacent to the Kenai Peninsula, immediately east of Kitchen Lights unit acreage.
--KRISTEN NELSON
|
