December 02, 2008 --- Vol. 14, No. 108December 2008

State rejects requests from Pacific Energy and Escopeta

State oil and gas officials have placed one Cook Inlet basin unit in default, and rejected an amended exploration plan for a neighboring unit.

The two decisions place question marks over the future of two independents with assets in Alaska, California-based Pacific Energy and Texas-based Escopeta Oil.

The companies have been working separately and together to prevent leases from expiring, and to extend work commitments on neighboring offshore prospects, the Corsair prospect owned by Pacific Energy and the Kitchen prospect owned by Escopeta.

The companies most recently teamed up on efforts to secure a “heavy lift vessel” capable of bringing a jack-up rig to Alaska to drill the two prospects, but prepared a contract for the ship that depended on the state extending leases. At the same time, Escopeta asked for two more years to drill an exploration well on its property at Kitchen.

In a pair of letters dated Dec. 1, Kevin Banks, the acting director of the state Division of Oil and Gas, rejected the request from Escopeta “because it does not meet the criteria necessary for approval” and rejected the heavy lift vessel contract, citing its conditional nature, its unspecific timelines and a failure of the companies to submit a deposit.

The letters came on the same day Banks and other state officials testified before a pair of House committees in a long, and at times tense hearing about why the Department of Natural Resources had taken a hard line against Pacific Energy and Escopeta — and also against ExxonMobil in the on-going Point Thomson case.

ANS November production up 2 percent

Alaska North Slope production averaged 758,099 barrels per day in November, up 2 percent from an October average of 743,112 bpd.

The BP Exploration (Alaska)-operated Northstar field had the largest percentage increase, up 4 percent, averaging 29,884 bpd in November compared to 28,732 bpd in October.

The largest average per-barrel increase was at the BP-operated Prudhoe Bay field, which averaged 372,078 bpd in November, up 12,092 bpd — an average of 3.4 percent — from an October average of 359,986 bpd.

The ConocoPhillips Alaska-operated Kuparuk River field averaged 156,562 bpd in November, up 2.6 percent from an October average of 152,588 bpd.

BP’s Milne Point field averaged 31,802 bpd in November, up 1.4 percent from an October average of 31,354 bpd. The BP-operated Endicott field averaged 15,689 bpd in November, up 0.3 percent from an October average of 15,644 bpd.

The ConocoPhillips-operated Alpine field averaged 114,255 bpd in November, down 2 percent from an October average of 116,640 bpd. The BP-operated Lisburne field averaged 37,829 bpd in November, down 0.9 percent from an October average of 38,168 bpd.

See full stories in the Dec. 7 issue, available to subscribers online at noon Friday, Dec. 5 at

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