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NEWS BULLETIN

February 16, 1998 --- Vol. 4, No. 10February 1998

BP & Chevron sign eastern North Slope agreement

BP Exploration (Alaska) Inc. and Chevron USA Inc. said Feb. 16 that they have entered into an agreement aligning their respective leasehold interests in the Point Thomson area east of Prudhoe Bay.

The alignment area, covering more than 450,000 acres, encompasses the Point Thomson unit and the Sourdough, Flaxman and Point Thomson discoveries. The alignment of leasehold interests also covers a number of exploration prospects both within and outside the unit.

Under terms of the alignment agreement, BP holds 56 percent interest in the two companies’ joint lease holdings in the area and Chevron holds the remaining 44 percent.

Dave Birsa, Chevron’s exploration manager for Alaska, said the agreement reflects the two companies’ compatible objectives in the Point Thomson area.

“It enables us to move more quickly on proposed exploration and development plans for the area, and it continues our focus in the eastern North Slope of Alaska, which is one of Chevron’s targeted growth areas for North America,” Birsa said.

Neil Ritson, head of exploration for BP Exploration Alaska, said the agreement continues a long-term business association based on a shared vision for exploring and developing in the eastern North Slope area.

“The sharing of technical resources will increase further opportunities in the Point Thomson area and allow Chevron and BP to maximize those opportunities,” Ritson said.

Chevron and BP have worked together successfully in the eastern North Slope since 1984, the companies said. In 1994, BP and Chevron drilled the Sourdough discovery, which was announced in 1997. More recently, the two companies jointly obtained 16 tracts in the Point Thomson area in Alaska state lease sale 86.

The Point Thomson area is about 40 miles east of Prudhoe Bay. The Point Thomson unit is operated by Exxon Company USA.

Double discovery announced near Prudhoe

Drilling to a satellite oil and gas prospect just north of the Prudhoe Bay unit has resulted in the discovery of two small new oil fields.

ARCO Alaska Inc., Exxon Company USA and BP Exploration (Alaska) Inc. said in a Feb. 13 statement that the 1 Sam (Sambuca) exploration well encountered two oil and gas producing intervals: a 100-foot vertical section in Kuparuk sands at a measured depth of 11,662 feet and a 160-foot vertical section in the Sag/Ivishak formation at a measured depth of 12,965 feet.

The companies said that the Kuparuk interval, which will become the Midnight Sun field, tested approximately 4,000 barrels per day of 29 API gravity oil and 1.5 million standard cubic feet of gas per day. The Sag/Ivishak formation, which will become the Sambuca field, tested 1,400 barrels per day of 24 API gravity oil and 490,000 standard cubic feet of gas per day.

ARCO Alaska spokesman Ronnie Chappell told PNA that “our estimate of proven and potential reserves in both reservoirs is 30-50 million.” The 1 Sam well was completed in December.

Chappell said the companies are still working on plans for continued evaluation, but that one more well was planned to the Midnight Sun field.

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