Oil exploration commenced onshore adjacent to lower Cook Inlet on the Iniskin Peninsula in 1900, shifted with considerable success to upper Cook Inlet from 1957 through 1965, then returned to lower Cook Inlet in 1977 with the COST well and Federal OCS sale. Lower Cook Inlet COST No. 1 well, drilled to a total depth of 3,775.6 m, penetrated basinwide unconformities at the tops of Upper Cretaceous, Lower Cretaceous, and Upper Jurassic strata at 797.1, 1,540.8, and 2,112.3 m, respectively. Sandstone of potential reservoir quality is present in the Cretaceous and lower Tertiary rocks. All siltstones and shales analyzed are low (0 to 0.5 wt. %) in oil-prone organic matter, and only coals are high in humic organic matter. At total depth, vitrinite readings reached a maximum ave age reflectance of 0.65. Several indications of hydrocarbons were present.

Oil analyses suggest that oils from the major fields of the Cook Inlet region, most of which produce from the Tertiary Hemlock Conglomerate, have a common source. More detailed work on stable carbon isotope ratios and the distribution of gasoline-range and heavy (C_12⁺) hydrocarbons confirms this genetic relation among the major fields. In addition, oils from Jurassic rocks under the Iniskin Peninsula and from the Hemlock Conglomerate at the southwestern tip of the Kenai lowland are members of the same or a very similar oil family. The Middle Jurassic strata of the Iniskin Peninsula are moderately rich in organic carbon (0.5 to 1.5 wt. %) and yield shows of oil and of gas in wells and in surface seeps. Extractable hydrocarbons from this strata are similar in chemi al and isotopic composition to the Cook Inlet oils. Organic matter in Cretaceous and Tertiary rocks is thermally immature in all wells analyzed.

Oil reservoirs in the major producing fields are of Tertiary age and unconformably overlie Jurassic rocks; the pre-Tertiary unconformity may be significant in exploration for new oil reserves. The unconformable relation between reservoir rocks and likely Middle Jurassic source rocks also implies a delay in the generation and expulsion of oil from Jurassic until late Tertiary when localized basin subsidence and thick sedimentary fill brought older, deeper rocks to the temperature required for petroleum generation. Reservoir porosities, crude oil properties, the type of oil field traps, and the tectonic framework of the oil fields on the west flank of the basin provide evidence used to reconstruct an oil migration route. The route is inferred to commence deep in the truncated Middle Jur ssic rocks and pass through the porous West Foreland Formation in the McArthur River field area to a stratigraphic trap in the Oligocene Hemlock Conglomerate and the Oligocene part of the Tyonek Formation at the end of Miocene time. Pliocene deformation shut off this route and created localized structural traps, into which the oil moved by secondary migration to form the Middle Ground Shoal, McArthur River, and Trading Bay oil fields. Oil generation continued into the Pliocene, but this higher API gravity oil migrated along a different route to the Granite Point field.