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Furie POD approved
State imposes conditions on Kitchen Lights unit plan of development
Kay Cashman Petroleum News
Jan. 3, the Alaska Department of Natural Resource's Division of Oil and Gas approved the 2025 11th plan of development for the Kitchen Lights unit that was proposed by KLU operator Furie Operating, a HEX Cook Inlet company.
As was the case with the 2024 10th POD, the plan was approved with conditions imposed by the division, including allowing Furie a mere 10 days to accept in writing the conditions or the POD would be denied.
The 11th POD runs from Jan. 4 through Jan. 3, 2026.
Other conditions imposed by the division include Furie drilling at least one well targeting additional natural gas resources within the Sterling and Beluga participating area, Furie providing confirmation of having a rig contract ensuring that it will have the means of drilling a well by May 1, 2025, and Furie providing the division with quarterly status updates regarding near term drilling and development planning over the course of the 11th POD period.
Phase 1 Furie, under the direction of its owner and chief executive John Hendrix, is currently in Phase I of full field development. This development phase largely concentrates on the Beluga formation near the company's Julius R Platform.
In its proposed 11th POD, Furie committed to the following:
*Securing the necessary permits for mobilization of a jack-up rig for drilling a sidetrack, grassroots well(s), and any other major sidetrack activities.
*Tentatively drilling up to two new penetrations contingent upon various factors, including the availability of the region's only jack-up rig, which is owned by a subsidiary of Hilcorp.
*Obtaining approval from the Alaska Department of Environmental Conservation for an increase in authorized produced water discharge.
*Continuing to maximize recovery and optimize production from the existing wells in the KLU.
Furie further committed to the following operations over the course of the 2025 11th POD period and subsequent 2026 POD period as part of Phase I of the full field development plan:
*Installation of three 30-inch and two 20-inch conductors.
*Increasing the total number of surface slots on the Julius R Platform from six to eight by installing a Solidrill Conductor Sharing Wellhead system on the two empty slots remaining on the platform. This system will allow for the installation of two wells in each of the two empty slots rather than one well per slot.
*Modification of the existing manifold, or installation of a new manifold, to accommodate more wells than for which the Julius R Platform was originally designed.
Finding and decision When considering a POD, the division must consider the criteria in 11 AAC 83.303(a) and (b).
Accordingly, the division considered the public interest, conservation of natural resources, prevention of economic and physical waste, protection of all interested parties including the state, environmental costs and benefits, geological and engineering characteristics of reservoirs or potential hydrocarbon accumulations, prior exploration activities, plans for exploration or development, economic costs and benefits to the state, and any other relevant factors, including mitigation measures.
The division said its Jan. 3 decision "serves as notification that Furie's failure to meet the commitments and conditions as described in this decision will impact any Division decision concerning the royalty modification requested by Furie," referring to the division's early December preliminary decision to grant Furie the royalty reduction the company asked for -- basically a 3% flat royalty rate for five years and then a sliding scale royalty reduction based on the Kitchen Lights unit gas price. The current royalty is 12.5%, a flat rate.
In approving the prior PODs for the KLU, the division found that the PODs "promoted conservation of natural resources, promoted prevention of waste, and protected the parties' interests. The Division incorporates by reference those findings."
The public has an interest in diligent exploration, evaluation, and development of the state's resources, the division said in its Jan. 3 decision.
The plans set forth in the proposed 2025 11th POD "protect this public interest by securing and mobilizing a jack-up rig to drill at least one well targeting additional gas resources from the Julius R Platform and modifying existing infrastructure or installing new infrastructure to accommodate bringing additional wells into production."
The proposed 11th 2025 POD "therefore is necessary and advisable to protect the public interest."
This approval is only for a general plan of development. Specific field operations require separate approval under 11 AAC 83.346, Unit Plan of Operations.
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