NEWS BULLETIN

January 11, 2010 --- Vol. 16, No. 2January 2010

Judge rules against state in Point Thomson case

Alaska Superior Court Judge Sharon Gleason today overturned a state decision to dissolve the Point Thomson oil and gas unit.

The case appears to give ExxonMobil a major victory, at least temporarily, and the state Department of Natural Resources a setback in the struggle for control of the rich but long undeveloped North Slope field.

ExxonMobil and other oil company stakeholders had appealed DNR Commissioner Tom Irwin’s April 2008 decision terminating the unit on grounds the companies had failed after decades to produce from leased, state-owned land at Point Thomson.

“This case is before this Court on appeal for the second time following an administrative determination on remand by the Commissioner of the Department of Natural Resources (DNR) terminating the Point Thomson Unit,” begins the opening, summary paragraph of Gleason’s 29-page ruling. “Because the contractual agreement between DNR and the Appellants precludes the termination of the Point Thomson Unit in these circumstances without consideration of ‘good and diligent oil and gas engineering and production practices,’ and because DNR failed to accord the Appellants their constitutional right to procedural due process in the remand proceeding, DNR’s decision is reversed.”

The ruling goes on to indicate the conflict clearly is far from over.

The two sides now have 30 days to “submit additional briefing” in the case, Gleason ruled.

See story in Jan. 17 issue, available online at noon, Friday, Jan. 15 at www.PetroleumNews.com.


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