Increased cook Inlet activity: moving fast with new ideas.

• Author: Bradner, Mike
• Position: OIL & GAS

A renaissance appears to be under way for Cook Inlet's oil and gas industry, and Alaskans are keeping their fingers crossed. Explorers are busy, helped by generous incentives from the state that can pay well over half the cost of test drilling. New companies, small and large, are on the scene, including firms experienced in redeveloping mature, depleted oil fields.

One is Hilcorp Energy, a large privately held company which purchased the Inlet's aged oil platforms in early 2012, has a solid track record in breathing new life into old fields in Louisiana and Texas. Another is Apache Corp., which has a record, from the North Sea and other places, in doing new exploration and making discoveries in older oil and gas basins.

Hilcorp and Apache are large independent companies, meaning they specialize in the "upstream" part of the business in finding and producing and oil and gas, but are not integrated "downstream" with their own refineries and marketing, unlike Chevron Corp., Marathon and other companies that previously dominated Cook Inlet.

There are also smaller independent companies engaged in redeveloping older producing wells and facilities, like Armstrong Oil and Gas, which is now producing gas from a small, previously discovered deposit near Homer, and Cook Inlet Energy, which is working on the west side of the Inlet. These companies are entrepreneurial and move fast with new ideas.

Finally, there are the small explorers, smaller independent companies like Furie Operating Alaska, formerly known as Escopeta Oil, which is now drilling in Cook Inlet with a jack-up rig; Buccaneer Energy, which will soon be drilling in the Inlet with a second jack-up rig, but which has meanwhile found new gas on the Kenai Peninsula and is now producing with one well.

Another small independent, NordAq Energy, an Alaska-based independent, is exploring on the Kenai Peninsula and has made a discovery in the Kenai National Wildlife Refuge on lands owned by Cook Inlet Region Inc., the regional Alaska Native Corporation based in Anchorage. NordAq is still assessing its discovery and no decision has been made to develop it. Buccaneer is meanwhile working to expand its gas production with new wells drilled in its Kenai Loop gas field near the City of Kenai.

Early Stages

All of this sounds good, but the Inlet's revival is still at a critical early state. Alaskans remember earlier revivals which fizzled. Years ago Forcenergy, a Texas-based firm, came to Alaska with new ideas and a burst of enthusiasm. The company purchased and expanded small producing...