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Providing coverage of Alaska and northern Canada's oil and gas industry
February 2019

Vol. 24, No. 6 Week of February 10, 2019

State says no to Alliance on Guitar request

Alan Bailey

Petroleum News

In a Jan. 23 letter from Chantal Walsh, director of Alaska’s Division of Oil and Gas, to Barry Foote of Alliance Exploration LLC, Walsh responded to a series of requests from Alliance regarding the Guitar unit, on the southwestern side of the Prudhoe Bay unit on the North Slope. Apparently Alliance has, among other things, requested a two-year extension to commitments relating to the unit, including a commitment to drill a well in the unit by March 31, 2019. Alliance has also reiterated a previous request to add another lease to the three-lease unit.

The unit consists of three state leases, which had previously formed part of the Hemi Springs unit, formed in 1983 and terminated in 1992. The additional lease, which Alliance claims is integral to its exploration plan, sits at the northwest quadrant of what, with the three existing Guitar unit leases, would form a square shape.

Walsh told Alliance that the company had not provided sufficient supporting evidence to warrant approval of a deferral of the drilling commitment. What has prevented Alliance from meeting this commitment, why does the company require a deferral, and why should the deferral be for two years, Walsh asked.

The request to expand the unit, to include an additional lease, amounts to an application to create a unit, Walsh said. But the request has not met the requirements for an application of this type, including the payment of a $1,500 application fee, she said.

- ALAN BAILEY






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