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Producers 2024: Vision hanging in there
Meets first requirement of modified POD, might lead to new North Fork well by end 2025
Kay Cashman Petroleum News
Vision Operating made its first report deadline of July 1, 2024, with the Alaska Department of Natural Resources' Division of Oil and Gas regarding the modified North Fork unit plan of development approved on March 5, 2024.
The POD was filed by unit operator Vision Operating LLC, a fully owned subsidiary of Louisiana-based Gardes Holdings Inc.
The onshore, natural gas producing North Fork unit, or NFU, is on the southern Kenai Peninsula. The division's approval letter was sent to Gardes and Vision executive Mark Landt.
In its 2024 POD Vision proposed to enhance production from existing NFU wells, convert a well to water disposal and drill additional wells. However, all Vision's proposed operations are contingent on market conditions and the ability to raise capital and secure a drilling rig.
The division approved Vision's POD, setting these conditions: "Vision will begin drilling a well in the NFU by the end of the calendar year 2025 and maintain operations to bring that well into production. Based on these conditions, the NFU 59th POD is approved through the end of 2025. Updates to this POD are due July 1, 2024, Jan. 1, 2025, and July 1, 2025."
Petroleum News asked Landt on Aug. 19 whether Vision Operating filed its July 1 update. And if so, what it said. Also, PN asked whether Vision/Gardes acquired any other acreage in Southcentral Alaska.
Here is what Landt had to say in response to the July 1 filing: "We have verbally responded. Nothing new."
In response to acquiring new acreage, which Bob Gardes initially suggested he would be doing when his company entered Alaska in September 2020: "No, we have not acquired any new acreage."
As of Nov. 15, 2024, all that remains the same, except for production.
Vision Operating's North Fork unit averaged 1,765 thousand cubic feet per day in September 2024, down 50 mcf per day, 2.74%, from an August average of 1,814 mcf per day and down 20.45% from a September 2023 average of 2,218 mcf per day.
The same six wells were in production at North Fork, but production was lower at all those wells.
NFU advantages In an Aug. 23, 2023, interview with Landt, PN asked him what Vision Operating and its 2,601.84-acre North Fork unit in Alaska's Cook Inlet basin offers investors.
"We can put new wells online almost immediately," Landt said.
"Also, the potential Southcentral Alaska natural gas market is very attractive in terms of current pricing and potential future pricing. According to recent utility reports addressing the long term -- 2027 and beyond -- one alternative is importing LNG at $12 to $32 per mcf. That puts natural gas pricing in the long-term in the $10-20 per mcf range," Landt told PN.
Another advantage, he said, is that that the onshore North Fork unit has all its infrastructure in place, is accessible by road, and is located on state, not federal land.
North Fork is accessed by a 12-mile road from Anchor Point, at the end of which is a 5-acre gravel pad bounded by fencing and gates. North Fork natural gas is transported through two fiberglass pipelines to Anchor Point where it ties into the Enstar line.
Brought online by Armstrong A Bill Armstrong joint venture first brought the North Fork unit online in 2011, even though the field was first unitized by Standard Oil Co. of California in 1965. North Fork produced from six Tyonek sandstones.
In March 2009, Armstrong Vice President of Land and Business Development Ed Kerr told the Alaska House Resources Committee that North Fork held between 7.5 billion and 12.5 billion cubic feet of natural gas reserves and said it was "realistic" the prospect could hold between 20 billion and 60 billion cubic feet.
"There is some potential that it could be substantially larger than that," Kerr said.
That same year Armstrong hired PGS Onshore to shoot a 3D seismic campaign over some 20 square miles around North Fork to help guide future drilling decisions.
The seismic acquisition "greatly improved the regional structural definition of the four-way anticlinal North Fork closure," Armstrong Cook Inlet said in state filings.
The trick at North Fork is to find productive patches within the sandstones.
"Depositionally, these are lenticular sands, so they come and go," Kerr told Petroleum News, referring to layers of sands and mud. "We're drilling through a package of sands."
Initially formed as a federal unit in1965, in 2006 the feds waived administration rights and transferred their North Fork unit leases to the state of Alaska.
Gardes takes over In late 2014, Armstrong sold the North Fork unit to Cook Inlet Energy LLC for nearly $65 million in order to concentrate his efforts on the oil-rich North Slope.
Bob Gardes of Lafayette, Louisiana, entered Alaska in September 2020 with the purpose of becoming a natural gas producer by acquiring bypassed and/or underdeveloped gas deposits in the Cook Inlet basin.
Gardes was first and foremost looking for natural gas, not oil. He told Petroleum News at the time that he views the Cook Inlet basin as one of four top gas regions in the world.
"We think the future in the U.S. is gas. It burns 98% cleaner than oil and coal. It is a transformational resource," Gardes said. "There is a lot of bypassed gas here because the deposits weren't big enough" for companies to bother with them.
Gardes' first, and so far, only acquisition in the Cook Inlet basin was the North Fork unit from Cook Inlet Energy by that time a Glacier Oil and Gas company.
Effective May 1, 2021, Vision became unit operator.
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