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NEWS BULLETIN

January 25, 2008 --- Vol. 14, No. 9January 2008

Eni begins development of Nikaitchuq field

Eni has started development of the Nikaitchuq oil field, offshore the North Slope of Alaska in the shallow waters of the Beaufort Sea. The company made the announcement this morning, Jan. 25, from its Milan, Italy headquarters.

Nikaitchuq, which will be the first oil field operated by Eni in Alaska, has recoverable reserves of approximately 180 million barrels of oil, the company said.

Total investment is expected to be about US$1.45 billion, and first oil is expected at the end of 2009, Eni said.

The field will be developed through some 70 wells, about one third of which will be drilled from onshore and the remainder from an offshore artificial island that will be built 4.5 kilometers, or 2.8 miles, from the coast. Approximately half the wells will be producing wells and half injection wells.

Average water depth at Nikaitchuq is about 3 meters, or 9.8 feet.

Production will be sent to a processing facility Eni will build onshore. It will have a capacity of 40,000 barrels per day. Fluids will then transported by pipeline some 22 km, or 13.7 miles, to the ConocoPhillips-operated Kuparuk River unit, which is linked to the Trans-Alaska Pipeline System.

Eni owns 100 percent working interest in the Nikaitchuq unit, and a 30 percent working interest in the nearby Pioneer Natural Resources-operated Oooguruk unit, which is expected to begin producing oil before the end of June.

Pacific Energy completes debt restructuring, warrant financing

Pacific Energy Resources has completed the restructuring of its Alaska loan repayment agreements, and an incentive warrant financing that raised almost $21 million for the Long Beach company, which purchased Forest Oil’s oil and gas assets last year.

Pacific Energy said it amended its loan agreements related to the Alaska acquisition with J. Aron & Company, an affiliate of Goldman, Sachs & Co., and “certain affiliates of Silver Point Capital.” Under the new structure the lenders agreed to extend the maturity date of the company’s August 2007 second lien credit agreement to Feb. 24, 2012, and to extend the time for a mandatory prepayment of a portion of that loan until March 31, 2009.

Pacific Energy President Darren Katic said, “This has minimized dilution and costs to the shareholders and puts in place a more permanent capital structure by which the company has increased flexibility and time to execute it development program.”

In November interviews with two publications, Andy Gustajtis said if Pacific Energy got its “refinancing out of the way,” the company would be his “number one favorite.” The former-oil-and-gas-analyst-turned-investment-banker also predicted Pacific Energy’s stock would double as the result of the debt restructuring, noting that Pacific Energy was “run by some very clever and dedicated people.”

Note: See full stories in the Feb. 3 issue of Petroleum News, which will go online at www.PetroleumNews.com on Friday,Feb. 1, at noon Alaska-time.

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