DNR grants four-year extension for Kitchen Lights Unit
(Anchorage, AK) – The Department of Natural Resources, Division of Oil and Gas proposes to grant a four-year extension to the existing Unit Agreement for the Kitchen Lights Unit, located in upper Cook Inlet. The agreement extends the existing unit until January 31, 2016.
Kitchen Lights Unit covers approximately 83,394 acres offshore Cook Inlet. Unit operator Furie Operating Alaska, LLC, is the first company in roughly 20 years to bring a jack-up rig to the Cook Inlet. Furie spudded the KLU #1 well on September 2, 2011 using the Spartan 151 rig, drilled to a depth of 8,805 feet measured depth, ceased drilling on October 28, 2011, and subsequently capped the well on November 13, 2011 without reaching final depth owing to weather.
DNR and Furie negotiated modifications to the proposed Plan of Exploration (POE) that set out a four-year schedule during which Furie commits to a multi-well drilling program with the first two exploration wells to be drilled in 2012. To accommodate these provisions, Furie and DNR also negotiated amendments to the Unit Agreement that all working interest owners ratified.
“We want Furie to have every opportunity to be a success story at Kitchen Lights Unit,” said Division of Oil and Gas Director William Barron. “This agreement gives the company a reasonable timeline to move forward with the exploration and development drilling outlined in the Plan of Exploration, as well as the incentive to do so. If the company does not meet its exploration or development obligations in a timely manner, the agreement provides for the termination or contraction of the unit acreage.”
On December 5, 2011, Furie filed an application for the Extension of the Kitchen Lights Unit Agreement to January 31, 2016. Under 11 AAC 83.336 and Article 14.2 of the Agreement, the unit automatically expires five years from its effective date unless it is extended by the Commissioner under 11 AAC 83.336(a)(2).
Furie Operating Alaska, LLC, formerly Escopeta Oil Co., LLC, is wholly owned by Houston-based Cornucopia Oil and Gas Company, LLC, formerly Escopeta Oil of Alaska LLC.