NEWS BULLETIN

June 23, 2003 --- Vol. 9, No. 62June 2003

Talisman closes Alaska farm-in deal with Total

Canadian independent Talisman Energy, through its wholly owned U.S. subsidiary Fortuna Exploration, today reached a farm-in deal with Total E&P USA to gain access to Alaska’s National Petroleum Reserve-Alaska.

The acreage, acquired by Total in the May 2002 lease sale, is west of the 430-million barrel Alpine field and other recent discoveries in the Lookout/Rendezvous area.

The agreement confirms a prediction six weeks ago by Talisman chief executive officer Jim Buckee who said his company was on the verge of a deal that would see it enter Alaska. (See stories in Petroleum News’ May 11 and May 18 issues.)

He told a conference call at the time that Talisman was in “late discussions ... of a likely deal in Alaska where we can target at least 300-(million) to 500-million barrel prospects.”

Under the agreement, Fortuna will participate in drilling an exploration well on a selected prospect to earn a 30 percent interest, with the option of earning similar interests on remaining prospects.

Following further evaluation, the first well is expected to start drilling in early 2004.

Following the disposal earlier this year of its controversial holding in Sudan, analysts estimated that Talisman had accumulated a war-chest of up to C$2 billion (US$1.48 billion) to replace some of its net 60,000 barrels per day of lost production from Sudan.

Buckee and a number of senior executives at Talisman (BP Canada until 1992)) have worked for BP and were reported to have given a high priority to gaining a foothold in Alaska.

On May 19, Talisman announced that its Norwegian unit entered an agreement to acquire the operated interest of BP Norge in the Gyda field of the Norwegian North Sea for C$123 million (US$91 million), along with a transportation agreement.

The deal involves 18 million barrels of oil equivalent of net proven assets, which started producing 13 years ago and is currently pumping 8,000 barrels per day of oil equivalent. Talisman is counting on an increase to 20,000 barrels per day by 2006 by adding 24 million barrels to reserves.

Denver independent files for Susitna exploration license

Clearflame Resources LLC of Denver, Colo., a new player in Alaska, has filed a proposal with the state of Alaska for a 499,840 acre exploration license in the Susitna Basin in Southcentral Alaska.

The proposed license area is west of the Parks Highway and surrounds Forest Oil’s proposed exploration license area on all but the northeast corner, extending as much as 30 miles to the west.

State Division of Oil and Gas Lease Manager Jim Hansen said June 23 that the state was working with Clearflame on the final terms of the license. He said there were no competitive proposals for the bid and he expects it to be approved by the end of July.

Jim Dodson, executive vice president of Andex Resources which has an exploration license in Alaska’s Nenana Basin, recently left Andex to go to work for Clearflame (see Petroleum News, Oil Patch Insider, June 1 issue.)

Editor’s note: See full story in the June 29 edition of Petroleum News.


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