NEWS BULLETIN

December 08, 2010 --- Vol. 16, No. 113December 2010

Escopeta plans to buy Spartan 151 jack-up rig

Escopeta Oil wants to buy the Spartan 151 jack-up rig.

The Houston-based independent made the announcement yesterday, in a letter to officials with the Alaska Industrial Development and Export Authority.

Escopeta recently executed a contract with Spartan to lease the mobile drilling unit, but the two companies also negotiated a 120-day sales option for Escopeta to buy the jack-up rig.

Now, Escopeta wants to take advantage of that option. “We should have something in writing before the end of the year” and possibly sooner, Escopeta President Danny Davis told Petroleum News today. Spartan confirmed that it was working with Escopeta. Last week the Louisiana-based drilling company placed ads in several Alaska newspapers looking for rig workers.

If successful, Escopeta would first use the jack-up rig for its own drilling needs and then lease it out to other operators interested in drilling offshore wells in the Cook Inlet.

That plan is similar to the business model recently proposed by Buccaneer Alaska, another independent Cook Inlet operator looking to bring a jack-up rig to Alaska.

Buccaneer recently asked AIDEA to invest up to $30 million in the purchase of the rig, and to issue $60 million in a one-time instrument called Recovery Zone Facility Bonds.

AIDEA is evaluating that proposal and is expected to discuss the matter next week.

Escopeta said it does not plan to seek public assistance for its project, other than various jack-up rig and exploration tax credits that the State of Alaska offers to all drillers.

Buccaneer, meanwhile, is moving forward on its project.

“Our development of a business plan for deployment of an Alaskan rig allowed for a number of contingencies,” Dean Gallegos, finance director for Buccaneer Energy, the Australian parent company of Buccaneer Alaska, told Petroleum News yesterday. “We believe our plan adequately covers all scenarios and we have proceeded accordingly.”

Mental Health Trust Land Office lease sale brings in $1.23 million

It appears to have been the most successful oil and gas lease sale the Alaska Mental Health Trust Authority has ever held.

Twenty-one bids on 17 tracts were opened in Anchorage this morning by the Trust Land Office.

High bids totaled $1.23 million for 64,240 acres of the 110,800 acres offered.

The sale was dominated by Apache Alaska Corp., which took all but one lease, some 62,972 acres and a total of $1,165,863. Buccaneer Alaska LLC took a single lease, 1,268 acres, for $64,774.36. Buccaneer had the per-acre highest bid, $51.10 per acre for the tract.

Apache became a Cook Inlet player this summer when it acquired almost 200,000 acres, onshore and offshore, from Samuel H. Cade, Daniel K. Donkel, Monte J. Allen, Douglas A. Barr and Daniel J. Donkel — with Cade the majority, and in some cases the sole — owner in most of the leases and Daniel K. Donkel a partner in most.

See more in the Dec. 12 edition of Petroleum News, available online to subscribers on Friday, Dec. 10 by 11 a.m.


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