What Oil Search didn't say about its Alaska operations in an April 30 release of presentation materials from the Macquarie Australia Conference was as interesting as what it did say.
For more than a year the ASX-listed oil and gas company has been talking about bringing in a third working-interest partner in coordination with exercising its June 30 option to buy out the balance of Armstrong Energy and GMT Exploration's working interests in the North Slope Pikka and Horseshoe acreage, where major oil discoveries have been announced since 2016. Peter Botten, managing director of Oil Search, said Feb. 18 that the task of bringing in the third working interest partner was "progressing smoothly" with several companies on a "good short list," intimating Oil Search would announce its choice in a matter of weeks.
Sharing the expense with a third partner initially made a lot of sense, especially when oil prices were depressed and before Oil Search's big discovery near the southern end of the Pikka unit in first quarter of this year during its inaugural drilling season as operator.
But in the April 30 presentation materials there was no mention of a third partner; instead Oil Search indicated it could "easily" fund capital expenses from its cash and cash flow, inviting speculation that perhaps both Oil Search and Repsol might be interested in retaining Pikka, Horseshoe and nearby acreage for themselves.
Repsol, too, in recent presentations to analysts has been very pleased with its future production from Alaska, with the first 120,000-plus oil production facility expected to come online at Pikka in the second half of 2023.
As to what was said in the April 30 presentation materials that appeared new, Oil Search said it was "evaluating opportunities to optimize development" of the Pikka unit, pursuing "early production opportunities" that involved the "sharing of production facilities," especially in the northern part of the unit.
- KAY CASHMAN
See story in May 5 issue of Petroleum News, available online May 3 at www.PetroleumNews.com
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