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NEWS BULLETIN

October 31, 2011 --- Vol. 17, No. 94October 2011

DNR forms four units for BRPC

Brooks Range Petroleum Corp. applied to form two units on state and Native leases east of the Colville River in the central North Slope. Instead, it got four.

In separate decisions in late October, the Alaska Department of Natural Resources divided the proposed Putu unit into the smaller Tofkat and Putu units, and the proposed Southern Miluveach unit into the smaller Kachemach and Southern Miluveach units.

BRPC applied to form the Putu unit in July over 39 leases, including 28 owned jointly by the State of Alaska and Arctic Slope Regional Corp., covering some 39,993 acres.

The original unit included three exploration blocks — North, Southwest and Southeast — but the state ultimately decided to break those three areas into two units. The North block is now the Tofkat unit, while the Southwest and Southeast blocks are now the Putu unit.

The Tofkat unit includes 21 leases owned jointly by the state and ASRC covering around 9,131 acres, while the Putu unit includes nine state leases covering around 21,946 acres.

Under the agreement for the Tofkat unit, BRPC must drill, test and complete the Tofkat No. 2 well and the Tofkat No. 2-A sidetrack into the Kuparuk formation by May 31, 2013, and the working interest owners must sanction the Tofkat Project by Oct. 1, 2013.

Under the agreement for the new Putu unit, BRPC must post a $10 million performance bond to guarantee that it will fulfill its original four-well drilling commitment.

The company must now drill four wells into the Upper Jurassic-age strata of the Kingak formation by May 31, 2013, two targeting the Musketeer trend (Brookian Sequence Boundary C) and two targeting the Big Foot trend (Brookian Sequence Boundary BC).

BRPC applied to form the Southern Miluveach unit in December (a revised application was submitted in March) over 40 leases, including 11 owned jointly by the state and ASRC, covering some 60,864 acres northeast of Putu.

The original unit included six exploration blocks — Northeast, Southeast, Northwest, Southwest, West and South. The state ultimately created the Southern Miluveach unit out of the Southeast block and the Kachemach unit out of the West and Northwest blocks.

The Southern Miluveach unit includes five state leases covering around 8,960 acres, while the Kachemach unit includes 11 state/ASRC leases covering around 16,487 acres.

The remaining area will not be unitized and those leases will expire at the end of their terms.

Under the agreement for the new Southern Miluveach unit, BRPC must drill, test and complete three wells — the North Tarn No. 1-A well, the Mustang No. 1 well and the Mustang No. 2 well or sidetrack — into the Kuparuk formation by May 31, 2012, and the working interest owners must sanction the Mustang project by Oct. 1, 2012.

The Kachemach unit is divided into two exploration blocks, Block A and Block B.

Under the unit agreement, BRPC must drill, test and complete one well in Block A targeting the Caribou trend (Brookian Sequence Boundary F) and one well in Block A targeting the Moonlight trend (TP4-2 Nanushak prospect) by May 31, 2013. If BRPC meets those commitments it must them commit to drill, test and complete one well in Block B targeting the Moonlight trend (TP4-1 Nanushak prospect) by May 31, 2014.

—Eric Lidji

See full story in Nov. 6 issue, available online at 11 a.m., Friday, Nov. 4 at www.PetroleumNews.com

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