April 2001 Vol. 222 No. 4  Exploration

Perry A. Fischer,  Engineering Editor

A new company; some discoveries; and Bush’s science budget

It’s rare indeed to see a new seismic venture when all one hears is merger and acquisition, but Superior Geophysical, Inc., a wholly-owned subsidiary of Adair International Oil and Gas, has just been formed. As reported in World Geophysical News, it’s an international, exploration service company engaged in the design and acquisition of 2-D and 3-D seismic data.

Bill Weisman is president, Gary Tolar is executive vice president and David Spalding is vice president of seismic processing. Each of these men has roughly 24 years’ industry experience: Weisman was at JDK, Continental Research and Allied Research; Tolar was in marketing at JDK; and Spalding was manager of seismic data processing at Universal Seismic. Welcome aboard gentlemen, to the long hours and hard work that we know you are used to, and kudos for the gumption, especially to Chairman John Adair.

Some discoveries. British operator Premier Oil Plc has discovered 450 Bcf of gas reserves offshore East Java, Indonesia, in Ujung Pangkah field. Premier said it had started discussions in East Java to market the gas. Premier, with a 40% stake, said the discoveries were in three wells that were drilled in the past four months. Its partners are U.S. Amerada Hess Corp. (36 %), Irish Dana Petroleum Plc and Canada’s Gulf Resources (both with 12%).

Denver-based Forest Oil Corp. made an oil discovery in Cook Inlet, raising hopes for a revival in Alaska’s oldest oil and gas producing region, which began producing in the 1950s. The company believes that the south central Cook Inlet area could still hold 50 million bbl or more of undiscovered oil. The discovery well, located at Redoubt Shoal prospect, tested at 1,010 bopd and is expected to produce 2,500 bopd if developed. The well could be the first of five. If the next well – which will be drilled soon – delineates the reservoir adequately, full development will occur.

Miami-based Forcenergy acquired the leases in 1996 and began the current drilling program, but then merged with Forest Oil last year. Gary Carlson, head of Forest Oil’s Alaska office, said that undiscovered reserves exist "because so many oil companies pulled out of Cook Inlet in favor of bigger prospects on the North Slope." Inlet production peaked in the early 1970s at 275,000 bopd, but in recent years, production there has been roughly steady at 30,000 bopd.

Meanwhile, in California, Nuevo Energy Co. made a modest gas find that tested 1 MMcfgd. The company said the Golden 1-21 well, located in Kern County about 4 mi from the prolific South Belridge and Elk Hills fields, was drilled to a 6,055-ft (1,900-m) TD. The company is filing permits to drill seven delineation wells near the discovery starting this summer. Nuevo is operator and holds an 86% interest in the well.

Alberta Energy and Gas Co. Ltd. has made a remarkable gas find in the Ladyfern area of northeast British Columbia, about 63 mi (100 km) northeast of Fort St. John. The discovery well drilled into Slave Point dolomite reef at 9,235 ft (2,833 m). The company estimates the well will produce 60 MMcfgd. A second well was about to be production tested as World Oil went to press. AEC is 100% owner of the wells, and expects production to begin in July. Absent the Ladyfern production, AEC produces about 1.35 Bcf of gas a day. The company has four rigs operating in the area and plans to spend $60 million drilling nine appraisal / development wells and associated infrastructure this winter.

Sciences, DOE spending down. President Bush released his first federal budget outline on February 28. Although the 2002 budget lacks detail, it indicates that funding for science at NSF, NOAA, NASA, DOE and EPA would be cut or held to less than the rate of inflation – a decrease in real terms, assuming inflation remains above 3%. Numbers were not provided for USGS, but the Wall Street Journal reported that USGS could face a 22% reduction this year. A detailed budget should be available by early April.

NSF (National Science Foundation) for 2002 would see only a 1.2% increase compared to last year, while NOAA would get just short of a 3% boost, with priorities rearranged to ensure procurement of the next generation of weather satellites. Space-exploration haters will be delighted if NASA only gets its proposed 2% increase. However, NASA’s long-term plan for Earth Observing System (EOS) satellites has been underfunded in recent years, and the budget would provide a 5% increase in 2002 for a science-driven EOS. Lower-priority remote sensing satellites and projects dealing with the environment would be discontinued to ensure that EOS priorities advance.

DOE is slated for a 3% funding decrease compared to last year, but no details were available regarding DOE’s Office of Science, which funds geoscience and atmospheric research. But the Bush proposal does intend to raise up to $1.2 billion from oil and gas drilling in the Arctic National Wildlife Refuge. (Expect a fight in Congress, with defectors from both parties, given the considerable public opposition.) DOE would also be funded to "strengthen solar and renewable-energy research and development." The President further proposes to "extend and increase tax credits for renewable resources, as well as a tax credit for rooftop solar energy equipment."

EPA, at $7.3 billion, would see a $500-million reduction from last year, but that’s more than last year’s budget request. The lone winner, as was promised – and it’s a whopper – a 13.8% increase to $23.1 billion in 2002 for the National Institutes of Health, with plans to double its budget within five years.

Comments? Write: fischerp@gulfpub.com