Homer Alaska - Business

Story last updated at 2:18 PM on Wednesday, August 15, 2012

Apache Corp. signs deal with CIRI to explore its lands

By Tim Bradner
Morris News Service - Alaska

Apache Corp. has signed an agreement to explore 250,000 acres of onshore lands in the Cook Inlet basin owned by Cook Inlet Region Inc., an Anchorage-based Alaska Native corporation, Apache announced in a press release Aug. 6.

The deal brings Apache's total land holdings in Southcentral Alaska to more than 1 million acres including acreage acquired in lease sales by the state of Alaska, the Alaska Mental Health Trust, private landowners and now Cook Inlet Region.

"Cook Inlet is a proven basin with material oil potential." Said John Hendrix, Apache's general manager in Alaska. "We believe there is substantial oil yet to be discovered, and new 3-D seismic will be the key to unlocking the basin's potential," he said.

Apache has a large multi-year, three-dimensional seismic program under way in Cook Inlet, the largest ever done in the region, and plans to drill its first exploration well later this year on the west side of the Inlet, company spokeswoman Lisa Parker said.

A second well is planned for a location on the inlet's east side. It will likely be drilled in 2013.

Several other companies, mostly smaller independents, are also exploring in the Inlet this year. Furie Operating Alaska LLC is working on an offshore exploration well using a jack-up rig, the Blake 151, that was brought to the Inlet last fall. Buccaneer Energy, an Australian independent, has additional onshore wells planned at its Cannery Loop field. These are not true exploration wells, but are planned to test the limits of the gas field that Buccaneer has discovered and is now producing from one well.

Buccaneer is also bringing a second jack-up rig to the Inlet and plans more offsore exploration this fall. NordAq Energy, an Alaska-based independent, is evaluating and testing an onshore gas discovery made in the Kenai National Wildlife Refuge on lands where CIRI owns the mineral rights.

CIRI has diversified holdings in commercial real estate and other businesses, owns substantial lands in Southcentral Alaska, holds mineral rights on some currently producing natural gas wells and on prospects currently being explored, including the one by NordAq Energy.

In other initiatives, Cook Inlet is now constructing a wind power project on Fire Island, in Cook Inlet near Anchorage, and is also exploring a potential underground coal gasification project on lands the corporation owns west of Anchorage.

Tim Bradner is a reporter for the Alaska Journal of Commerce.