Sunday, October 16, 2011

Escopeta reaches stopping point for KLU, planning future work

By Eric Lidji

Escopeta Oil Co. has completed the first stage of drilling at its Kitchen Lights Unit No. 1 well and now must wait for word from the state before it can continue to total depth.

Escopeta recently reached a depth of 4,933 feet at the offshore well in the Cook Inlet, the depth where the state asked the company to temporarily stop work. “We’re at Checkpoint Charlie right now,” Escopeta Strategic Officer Steve Sutherlin said on Oct. 12.

Sutherlin is a former Petroleum News reporter and a minority owner of the company.

Although Escopeta intends to drill KLU No. 1 to 16,000 feet, the Alaska Department of Natural Resources told the company to pause at 4,800 feet while it “evaluates and determines the reasonableness and prudence of moving forward with additional drilling,” according to a Sept. 2 letter from Division of Oil and Gas Director Bill Barron.

After logging the well at its current depth, Escopeta plans to open the existing 12 and 1/4-inch wellbore to 17 and 1/2 inches and then run the 13 and 3/8 inch cement casing.

Drilling could continue this year

Escopeta could conceivable continue drilling this year, but only if the company and the state both feel comfortable with moving forward this fall, Sutherlin said. The company recently performed a successful test on its blowout preventer equipment, he added.

It remains to be seen how the state-requested delay will impact state-imposed deadlines for Escopeta to reach a total depth by this fall or lose the unit, but Sutherlin said the company is operating on the assumption that the sides will come to an agreement and noted that Escopeta officials plan to meet with state officials soon about a range of issues.

“We just want to make sure that we’re all on the same page,” he said.

Shallow gas would be marketed

Although KLU No. 1 is targeting oil, it will likely encounter shallow natural gas deposits first and Escopeta plans to make a push to bring those to market soon, 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,” he said. “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.”

Escopeta began drilling KLU No.1 in the Corsair prospect using the Spartan 151 jack-up rig on Sept. 2, but a “malfunction on a downhole tool” soon after spudding caused several weeks of delays, Escopeta President Ed Oliver told Petroleum News in early October.

In addition to the Corsair prospect, the 83,394-acre offshore Kitchen Lights unit also includes the East Kitchen, Kitchen and Northern Lights oil and gas prospects.

The Spartan 151 is the first jack-up rig in Cook Inlet since 1994.

Republished with the permission of the Petroleum News