Aurora Gas Begins Production from Nicolai Creek Unit in Alas

Aurora Gas has commenced production from its NCU 1-2-9 Facility at the south end of the Nicolai Creek Unit (NCU) on the West Side of Cook Inlet in Alaska. Initial production was approximately 4.0 million cubic feet per day and gas is being delivered into the Marathon operated Cook Inlet Gas Gathering System (CIGGS) for sales to Unocal. The company subsequently increased production to 10.0 million cubic feet per day (MMcfpd) without difficulty and intends to produce at that level unless market conditions dictate any reductions. The NCU 1-2-9 facility will dehydrate and compress gas produced from three wells; two of which (NCU #1B and NCU #2) were successful recompletions from Aurora's 2002 program and the third, (NCU #9) a newly drilled well during Aurora's 2003 program. During recent four-point tests, the No. 1B flowed 1.4 MMcfpd at 1340 psi, the No. 2 flowed 7.4 MMcfpd at 775 psi, and the No. 9 flowed 5.4 MMcfpd at 580 psi. The company laid approximately 1.7 miles of new pipeline to connect the 1-2-9 facility to the existing NCU interconnection with CIGGS. "It is exciting to finally have these wells on production. We are pleased that the wells have good deliverabilities, and that the facility performs well over a broad range of production rates," said J. Edward Jones, Aurora's Executive Vice President in charge of Engineering and Operations.

Aurora has also successfully recompleted the Mobil Moquawkie Well #1 in the previously idled Moquawkie Gas Field. The well tested sustained production of 7.6 million cubic feet per day on a 40/64 choke with 860 psi of back pressure. "This is what it's all about for Aurora," said company President, G. Scott Pfoff. "This company is built on the belief that tremendous amounts of economically recoverable shallow gas reserves exist on Cook Inlet's West Side, much of which has already been discovered but is in need of development. We will now diligently commence pipeline and facility work to tie the Moquawkie Field into the infrastructure." The company intends to lay about 4.4 miles of gathering line in a southerly direction to tie the Moquawkie Field into a newly constructed interconnection with CIGGS. First production is anticipated during the second quarter of 2004.

The company sees another busy year in 2004, starting with a seismic program in the first quarter, pipeline and facility work in both the first and second quarters, and another round of re-entry/recompletion work from May until October. The company plans to drill or re-enter at least five wells next year. "We are starting the process of prioritizing the well work candidates and hope to formulate a schedule in the next few weeks for our 2004 program," said Mr. Pfoff. "We will take what we have learned in the field and use it to assess the technical and economic potential of each project. Obviously, we want to tackle the best projects first. I can easily see the next year being the busiest ever for Aurora Gas."