NEWS BULLETIN

August 26, 2005 --- Vol. 11, No. 69August 2005

Eni acquires Armstrong’s leases in Alaska

In mid-August Eni Petroleum Exploration Co. Inc. purchased all the assets of Armstrong Alaska consisting of 104 oil and gas leases on the North Slope where Eni said “reserves are expected to exceed 170 million barrels.”

The leases encompass 341,500 gross (273,000 net) acres onshore and offshore in state and federal waters and include Armstrong’s minority working interests with Pioneer Natural Resources and Kerr-McGee in the proposed Oooguruk and Nikaitchuq developments.

An affiliate of Italy’s Eni SpA, Houston-based Eni Petroleum told Petroleum News Aug. 26 that it considers the “North Slope and Beaufort Sea as areas with exploration potential for new finds” and said Eni has “decided to establish a position in the area with an emphasis of consistent growth.”

The company is interested in other investments in Alaska and is paying “special attention to the Beaufort and Chukchi sea areas.”

Eni is “evaluating” whether or not to set up an office in Alaska. It has not yet selected a person to oversee its Alaska assets, but said when an “Alaska coordinator” is named that person would report to Eni Petroleum’s Houston office which manages the company’s E&P operations in the Gulf of Mexico.

When asked if Eni plans to be an operator in Alaska, the company said it operates in other Arctic areas, and “generally takes a leadership role in its joint ventures worldwide.”

Initially, Eni said it “intends to fully cooperate with its partners who operate some projects in the pre-development stage. It is Eni’s intention to bring its experience onboard while taking the time to understand the peculiarity and challenges of the area.”

The company has not yet decided whether it will drill any of its 100 percent-owned acreage this coming winter: “It is too early to comment. This will be evaluated during our 2006 budget and planning process.”

Eni did not disclose the terms of its deal with Armstrong.

Editor’s note: see story in Aug. 28 issue of Petroleum News.

Armstrong staying in Alaska

Armstrong Alaska has sold all of its oil and gas leases (see above story) in Alaska to Eni Petroleum Exploration Co., but Armstrong is staying in Alaska.

“We’re definitely not leaving Alaska,” Armstrong President Bill Armstrong told Petroleum News.

“We were not capitalized enough to do the things our North Slope partners Pioneer Natural Resources and Kerr-McGee wanted to do. They’ve both been incredibly great partners for us. It was important to me not to slow them down and be a drag on development at Oooguruk and Nikaitchuq, so we sold our assets to Eni,” he said.

“Eni will be a great asset to Alaska,” he said.

Bill Armstrong says Armstrong Alaska will stay in the state and continue to put together exploration prospects. “There are certain things we’re pursuing.”

The company, he said, will continue to focus on northern Alaska. “We still see huge opportunities on the North Slope. … It’s a great place to be and it’s a great petroleum system.

“There were a lot of companies interested in what we had in Alaska. I think you’ll see more companies coming to the North Slope” in the near future, Armstrong said.

Editor’s note: See the full Eni and Armstrong stories in the Aug. 28 edition of Petroleum News, available online at noon (Alaska-time) today.


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