Miller Energy Resources, Inc and its wholly owned Alaskan operating subsidiary, Cook Inlet Energy ("CIE") have announced that all three drilling operations in Alaska are on schedule. The RU-1 sidetrack ("RU-1A") has been drilled to total depth ("TD") and is ready for completion while the Sword # 1 well and Olson Creek # 1 well drilling operations are both approximately half way through.
Miller's RU-1A well has been drilled to a final measured depth of approximate 15,050' and after reaching TD the Company has set and cemented the final 5.5" casing string in place. Well log analysis reflects oil shows throughout the entire Hemlock and upper portion of the West Foreland formation. RU-1A penetrated the top of the Hemlock 12 feet structurally higher than the RU-1 well and shows an overall increase in permeability, porosity and resistivity. The well is scheduled to be perforated over a 455 foot section up-dip to perforations of RU-1 and will eliminate the obstructions that remained in the original wellbore providing an unrestricted flow path from the formation to the surface. The Company expects to change the wellbore fluid and filtering, perforate and run the completion over the next week at which time production will be brought online. Miller will announce initial production (IP) rates soon after the production has stabilized.
The Sword #1 well has been drilled more than half way to TD or approximately 10,156' and the Company has set and cemented in place a 9-5/8" casing string. Third party well log analysis has produced a significant gas hydrocarbon show in a sand section covering a 200 foot interval from a measured depth of 8,268 feet with over 600 units of gas. The rig crew working the well is currently switching from water based drilling mud to oil based and will resume drilling shortly.
The Company's first Olson Creek well has reached an approximate measured depth of 4,700 feet and is planned for a TD of 7,500 feet. Intermediate casing string has been set and cemented in place to approximately 2,000 feet. The Company reports that it has drilled through the Sterling formation and has penetrated the top of Beluga formation which is the primary target zone. Preliminary indications show the presence of hydrocarbons in the Beluga formation with gas charged coal seams. Miller expects to finalize the drilling of the Olson Creek #1 well over the next three weeks.
"Operationally we are right on schedule and proving up our geological thesis," stated David Hall, Miller Energy's Chief Operating Officer. "The log results from our drilling activities are providing crucial data and indicate that we have moved on the right targets. Not only should these new wells provide the incremental production increases we are looking for but also prove very impactful in identifying developmental runway and increases to reserve potential."