Dave Donaldson, APRN – Juneau
On Monday, the state offered a little more time for a Texas-based developer to drill for natural gas in Cook Inlet – but not much. Technically in default, Escopeta Oil and Gas has one last chance to drill a well.
In a letter to the company, the Department of Natural Resources placed the Kitchen Lights Unit of Cook Inlet in default of its leases of more than 80,000 acres. Oil and Gas Director Kevin Banks says the leases have been extended four times and the unit is in line to be terminated.
Development has stalled since Geological and Seismic tests done by Escopeta in 2001 and since updated– indicated that the company has the potential to develop more than a trillion cubic feet of gas in Kitchen Lights. The most recent delay has been attributed to the company’s need to rent a semi-submersible vessel and a Jack-Up rig for the drilling operations. Banks says termination of the unit can be avoided if Escopeta meets a time schedule to resolve those problems.
Besides the $4-million bond, the extension of the lease depends on a well completed by the end of September 2011. Banks says the prospect is among the more attractive areas for development in Cook Inlet. The letter of default from Commissioner Tom Irwin says the state has seen strong interest in Cook Inlet development and it is in the state’s best interest to maximize the potential for the area. Danny Davis, president of Escopeta, did not return phone calls to comment on the company’s plans.
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