NEWS BULLETIN

April 05, 2019 --- Vol. 25, No.14April 2019

Jade gets final OK from state for Sourdough development plan

Jade Energy LLC received its final approval from the state Division of Oil and Gas on April 4 for its Sourdough plan of development in the Point Thomson unit where the Alaska-based independent is scheduled to drill a well in early 2020.

Sourdough is an untapped oil discovery on state land next to the border of the ANWR 1002 area, a narrow strip of coastline set aside for potential development by Congress because of its hydrocarbon-rich geology.

The Sourdough lease and its two mid-1990's BP discovery wells lie in the Eastern North Slope's Point Thomson unit, or PTU.

In November 2018, as part of a farm-out agreement, PTU operator ExxonMobil assigned a 63 percent working interest in ADL 343112's Tract 32 to Jade, retaining a 2 percent overriding royalty.

This most southeasterly PTU lease is estimated to hold 100 million barrels of recoverable oil, per a 1997 BP press release.

Jade's members and managers are Anchorage-based Erik Opstad and Castle Rock, Colorado-based Greg Vigil, who each own 50 percent of the company.

The first proposed Sourdough plan of development for PTU Area F was submitted Dec. 21, 2018, by Jade to the division. Then-division Director Chantal Walsh formally told the unit working interest owners - ExxonMobil, BP, ConocoPhillips, Colt and, most recently, Jade - in a Dec. 27 letter that although the plan "as submitted" was incomplete, that fact "in no way triggers the release of Area F acreage." Dec. 21, she noted, "remains the date of submittal" for purposes of the Point Thomson Unit Settlement Agreement with the state, which dates back to March 29, 2012.

In other words, the Dec. 21, 2018, submittal satisfied the requirement that a POD be submitted for Area F before year-end 2018, per the unit's settlement agreement, even though the submittal was deemed incomplete.

Jade submitted an amended plan of development, or POD, on Jan. 24, 2019, which the division deemed complete on Feb. 4, 2019. Jade provided a technical presentation on the POD on March 4, 2019, and submitted amended versions of both the public and confidential portions of the POD on March 19 and March 29, 2019, respectively.

An April 4, 2019, decision signed by James Beckham, acting division director, approved the 2019 Area F POD and its early 2020 well.

Based on analysis of the appraisal well data, Beckham said, Jade "will move forward accordingly with additional development at Area F and adjoining areas in the 20202021 winter drilling season. Current plans include drilling an additional lateral into the Brookian reservoir and production testing. The need for additional delineation wells and the overall economic feasibility of a field development program at Area F will be considered following the 20202021 season."

- KAY CASHMAN

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