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June 29, 2007 --- Vol. 13, No. 59June 2007

DNR declines POE extension for Arctic Fortitude Unit

The Alaska Department of Natural Resources has declined a request by Alaskan Crude Corp. for an extension to the timeframe for Alaskan Crude’s planned drilling operations in the Arctic Fortitude unit on the south side of the Prudhoe Bay unit on Alaska’s North Slope. Alaskan Crude had been planning to re-enter the Burglin No. 33-1 well in the unit during the summer of 2007, to test several intervals, including the West Sak-Ugnu, the middle Cretaceous Brookian and a portion of the Ivishak formation. The well is in an existing gravel pad.

Alaskan Crude had planned to move a drilling rig and other equipment to the pad during the winter tundra travel season. However, on May 25 the company told DNR that it had been unable to transport the equipment as planned because of insufficient snow cover on the tundra and difficult wind conditions. Instead, the company proposed moving the equipment in the summer, using certified tundra travel vehicles.

And Alaskan Crude requested an extension of the time period for the drilling work commitments, to accommodate the revised transportation arrangements.

But, in a June 28 letter to Alaskan Crude President James White, Kevin Banks, acting director of Alaska’s Division of Oil and Gas, declined Alaskan Crude’s request, because the company had not applied for a land use permit or made arrangements for the appropriate tundra travel arrangements in a timely manner.

“Failure to timely submit the appropriate application or requests to DMLW (the Division of Mining, Land and Water) does not justify relief under the initial POE (Plan of Exploration) because the AFU was approved on June 29, 2006, which provided adequate time for scheduling winter equipment deliveries to the AFU location,” Banks said.

The division said that the Arctic Fortitude Unit will terminate at 5:01 p.m. on July 1, 2007, if Alaskan Crude fails to pay $60,000 to the division and fails to provide a written statement of its intentions to complete all of the stage 2 and stage 3 work obligations in the plan of exploration.

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