Houston-based Escopeta Oil said it has made 3.5 trillion cubic feet of natural gas discovery at its 83,394-acre Kitchen Lights lease in southern Alaska's Cook Inlet.

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However, the company is facing a $15 million fine from the US Department of Homeland Security for transporting its drilling rig, Spartan Drilling Co.s Blake 151, from Freeport, Texas, to Cook Inlet, on a foreign-flagged vessel in violation of the Jones Act.