State approves UltraStar’s Dewline unit

One exploratory well drilled over winter, but Weeks won’t reveal the results or cost; second well to be drilled by May 2013

By Wesley Loy

For Petroleum News

Alaska regulators have approved formation of UltraStar Exploration LLC’s Dewline unit on the North Slope.

The five-year unit agreement is important because it will extend the three state leases comprising the unit beyond their fast approaching expiration dates.

Now tiny Anchorage-based UltraStar has time to gather more seismic data and round up more investors, said Jim Weeks, the company’s managing member.

The Dewline unit ties together three leases (ADL 390419, ADL 389943 and ADL 389944) covering 3,253 acres north and west of the Prudhoe Bay unit and south of the Northstar unit. UltraStar is the sole working interest owner.

Under the decision state Division of Oil and Gas Director Kevin Banks signed on June 4, UltraStar is obligated to drill two exploratory wells to test the hydrocarbon potential of the Ivishak formation by May 31, 2013.

One well drilled this winter

Asked what the well showed, Weeks replied, “I’d rather not say.”

He also declined to say how much investors spent on the 9,900-foot vertical hole, which was drilled with Doyon Drilling’s Arctic Wolf rig.

“I’ve got the dining room table spread out with all these invoices,” Weeks said in a June 10 interview with Petroleum News. He plans to submit the invoices, canceled checks and other records to the state for exploration tax credits.

Weeks said UltraStar is aiming to drill its second well, the North Dewline No. 1, either early next year or in 2011. If the company scores a commercial find, say 10 million barrels of oil, the plan would be to pay fees to process it through the nearby Prudhoe facilities, then sell the crude at Pump Station 1 of the trans-Alaska pipeline, he said.

Several exploratory wells dating back to 1969 have been drilled in the vicinity of the Dewline unit, some testing for oil, the state’s unit decision says.