NEWS BULLETIN

August 11, 2003 --- Vol. 9, No. 79August 2003

Point Thomson owners slow up, reevaluate project

The Point Thomson unit owners have asked the state of Alaska for extensions on development dates for the eastern North Slope field, and have met with agencies working on the project's environmental impact statement.

"We are in a reevaluation stage at this point," ExxonMobil spokesman Bob Davis told Petroleum News Aug. 11. He said there are "cost challenges" on the gas cycling project "and also challenges relating to the reservoir."

Davis said the Point Thomson partners are "looking at project options potentially a revised gas cycling project and other options for development of the unit." The plan being evaluated in the EIS included 13 production wells, a processing facility and a 22-mile pipeline to Badami.

The reevaluation is based on two factors, he said: "one is the cost of the original project relative to what we feel we could extract from the reservoir" and the other is "some new information that came in recently on the makeup of the reservoir that does present some challenges." The companies are "still looking at gas cycling," Davis said, but "it may be a different configuration or different facility from the original design and we're looking at some other options as well."

The companies should be in a position later this year to be more specific about those other options, he said.

Four companies hold more than 98 percent ownership in leases in the Point Thomson unit: ExxonMobil Production is the field operator; the other major owners are BP Exploration (Alaska), Chevron U.S.A. and ConocoPhillips Alaska.

In April, the companies requested two-year extensions from the Alaska Division of Oil and Gas for three commitments the companies agreed to as part of the state's 2001 approval of unit expansion.

The division has agreed to only part of the requested extensions.

The requested extensions were for: the one-time election to contract the unit by June 15, 2003; begin development drilling by June 15, 2006; complete seven development wells by June 15, 2008.

The division approved a one-month extension of the contraction election deadline in May. In June, the owners requested a six-month extension of the contraction election deadline, which the division granted, extending that deadline to Jan. 15, 2004, and increasing the charge for that contraction from $8 million to $10 million, with the amount to be paid prorated if the companies elect to contract new acreage prior to Jan. 15.


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