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CIE pledges $18M platform removal bond
Anchorage-based oil and gas producer Cook Inlet Energy LLC has agreed to fund an $18 million “performance bond” to cover the eventual dismantlement of the Osprey platform in Alaska’s Cook Inlet.
The company, a subsidiary of Tennessee-based Miller Energy Resources, acquired the shut-in platform as part of a deal in late 2009 to buy an assortment of oil and gas assets from Pacific Energy Resources Ltd., which was undergoing bankruptcy liquidation.
The bond agreement, signed with the Alaska Department of Natural Resources, was disclosed in a quarterly report Miller filed with the U.S. Securities and Exchange Commission on March 22.
The report further said the DNR had approved a redevelopment plan for the Redoubt unit, in which the Osprey platform stands.
Miller said the bond agreement, along with the redevelopment approval, means “we have now met the State’s requirements to bring the offshore Osprey oil platform out of lighthouse mode and back into production.”
Millions already set aside When Miller and Cook Inlet Energy acquired the Pacific Energy properties, they assumed liabilities related to decommissioning wells and other assets.
The SEC filing indicates the companies already have come a long way toward funding the $18 million bond for the platform.
Under the agreement with the state, about $6.6 million the previous owner contributed to an escrow account can apply toward Cook Inlet Energy’s obligation, Miller said.
And the company reported it has accrued millions more toward the Osprey retirement liability.
Miller, traded on the Nasdaq exchange, reported oil and gas revenue of just over $7 million for the three months ended Jan. 31.
—Wesley Loy
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