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NEWS BULLETIN

March 08, 2010 --- Vol. 16, No. 18March 2010

TG World relinquishes interest in Sak River 1-A well

The Canadian independent TG World Energy Corp. is giving up its stake in a North Slope exploration well after initial production tests proved less than successful.

A production test of the Kuparuk C-1 sandstone at the Sak River 1-A exploration well on March 5 and 6 “recovered water and a minor amount of oil,” according to a press release the company posted on its Web site this morning. “The fluid composition was measured as 97 percent water on average with minor oil and gas content,” the company said.

As a result of what it called an “unsuccessful” well, TG World gave up “certain working interests in the Beechey Point Unit leases in Alaska to AVCG,” or the Alaska Venture Capital Group, the Kansas-based parent of Brooks Range Petroleum Corp., the independent operating a multiyear exploration program on behalf of several partners.

Sak River No. 1-A is a sidetrack of a well BRPC drilled in 2007 to a total depth of 11,348 feet and a measured depth of 13,110 feet. That well did not encounter any hydrocarbons.

TG World paid 45.7 percent of the drilling, completion and testing costs of Sak River 1-A in return for a 35 percent interest in the well. The company said it was keeping a “net profit interest after payout in the North Shore No. 1” discovery from 2007, as well acreage in the Beechey Point unit “outside of the drilling blocks of Sak River, North Shore and Pete’s Wicked acreage.” TG World is also keeping a 25 percent stake in leases outside of the Beechey Point Unit, and a 20 percent stake in the North Tarn farm-in.

TG World also said that North Tarn exploration, considered for this winter, would now be pushed to early 2011 because of timing constraints as the end of winter approaches.

BP’s Alaska profits drop slightly in 2009

BP Exploration (Alaska) earned $1.89 billion in Alaska last year, down around 3 percent from the $1.95 billion the company earned in 2008, according to annual financial filings.

Those relatively flat year-over-year profits came as total revenues fell 35 percent, to $5.04 billion in 2009 from $7.76 billion in 2008, largely as a result of lower oil prices.

BP produced 181,000 barrels of oil a day in Alaska last year, down around 8 percent from the 197,000 bpd produced in 2008. BP operates Prudhoe Bay, the largest oil field in North America, and 14 other North Slope oil fields, and holds a stake in six other fields.

Despite those drops in sales and production, BP posted level profits because its tax burden fell 64 percent to $1.18 billion in 2009 from $3.29 billion in 2008 as a result of progressive elements in the Alaska tax code that rise and fall with the price of oil.

Editor’s note: See full stories in the March 14 issue of Petroleum News, which will be available online at noon on March 12 to subscribers at www.petroleumnews.com.

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