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Savant hopes to drill next winter Denver independent has the capital to move forward on its seven leases near BP’s Liberty oil prospect in the Beaufort Sea Kay Cashman Petroleum News
Savant Resources LLC, the newest oil and gas leaseholder on Alaska’s North Slope, expects to drill an exploration well next winter “if all the stars line up,” company President and CEO Patterson “Pat” Shaw told Petroleum News in a recent interview.
Shaw and Greg Vigil, the Denver independent’s executive vice president and chief operating officer, were in Anchorage in mid-April, making the rounds with Erik Opstad, who has signed on as a consultant in Alaska.
Because of his working knowledge of how business is done in Alaska and his familiarity with North Slope drilling rigs, Opstad has been tasked with assessing the rig availability situation in Alaska and putting together a group of contractors for Savant’s exploration program.
Fully funded, ready to roll Unlike some of the smaller independents that pick up leases on the North Slope, Savant is “fully capitalized to go forward” with exploration on the seven leases it picked up at the State of Alaska’s March 1 Beaufort Sea areawide lease sale.
“We’re not looking for investors. We have a stable of investors through partnerships that provide all the capital we need,” Shaw said.
In the Lower 48, Savant joint ventures with other oil and gas companies “if it’s mutually beneficial,” which is something the company will consider doing in Alaska, “but we’re not out raising money. We are a closely held private company. Our board … has some very significant, high net worth individuals that we are partners with.”
In addition to Shaw and Vigil, Savant’s board (which is also its management committee) includes: John W. Martin, director, Aviation Technology Group; Anthony R. Mayer, president, Captiva Resources; Douglas A. Pluss, partner, Realty Funding Group; James B. Wallace, partner, Brownlie, Wallace, Armstrong & Bander Exploration.
“Two of our institutionalized investors include Wellington Management out of Boston and EnCap Investments out of Houston,” Shaw said. “We’re very well capitalized to take advantage of the opportunities that are before us on the slope.”
Shaw, who won the North Slope leases and is transferring them to Savant Alaska LLC, bid a total of $1.465 million for the seven leases, his bids ranging from $10.17 to $207.35 per acre. The tracts are east of Prudhoe Bay adjacent to BP’s Beaufort Sea Liberty oil prospect and extend east towards BP’s offshore/onshore Badami field along the Mikkelsen Bay fault zone.
The geology of the area suggests that either an Ellesmerian Endicott play or a Badami-style Brookian play would be the subject of Savant’s interest, State of Alaska geologist Paul Decker told Petroleum News after the sale.
Still investigating Vigil, an engineer who worked for BP on the North Slope at Endicott and Prudhoe until taking a voluntary early retirement package in 1992, says Savant still has some unanswered questions about the North Slope — concerns that need to be put to rest before the company commits to drilling next winter.
“The North Slope is a tough operating, high-cost environment. A high oil price helps mitigate that, but some of the concerns we haven’t completely addressed internally include how facility access could work. We like the opportunities; the North Slope is a very prolific province. There are a lot of interesting plays. … And, to date information has been fairly free flowing from the State of Alaska, which is very helpful for our size company,” Vigil said, pointing out that the help Savant has received from the Division of Oil and Gas and other government agencies was “very instrumental in our deciding to lease up there. It seems like the state is saying ‘we’re open to business for smaller companies’ and we think that is positive for us, very pro-development, especially from an area where traditionally only big companies have been operating.”
Vigil said since he left Alaska he has been interested in getting involved with an independent on the North Slope. “In 1996, after I came back to Denver, I was with MCNIC Oil & Gas Co. when we made an effort to buy CIRI out of its interest in Endicott.”
Savant, he said, is interested in “smaller opportunities near existing infrastructure on the North Slope — small targets that the big companies may not be able to justify developing.”
Bill Armstrong’s influence Savant’s interest in the North Slope was further stimulated by the success of Shaw’s friend and former business associate Bill Armstrong, president of Denver-based Armstrong Oil and Gas. In the last few years Armstrong put together several plays on the North Slope, bringing in bigger companies as partners to operate them — specifically Pioneer Natural Resources and Kerr-McGee. Oil discoveries were made on three of the prospects; one of which is in development and another is close to being sanctioned.
Last year Armstrong sold the remainder of its Alaska interests to Eni Petroleum.
“In the Lower 48 we’ve established strong relationships with majors and bigger independents and we work with them on projects that don’t meet their minimum economic threshold. We’re successful in doing that in the Lower 48 and would like to take that same niche up to the slope. Bill (Armstrong) proved that a small niche operator can be effective there. We hope that bodes well for our business strategy,” Shaw said.
The company has no immediate plans to open an office in Alaska. “We want to build up a critical project mass before we do that,” Shaw said.
When asked if Savant would be interested in other parts of Alaska, Vigil said “probably not now. Right now we’re concentrating on the North Slope.”
Editor’s note: The company profile Savant Resources gave to Petroleum News says the company was founded in 1988 and has “a core producing oil and gas asset base, a diversified project leasehold inventory with interests in over 900,000 acres, and an expanding portfolio of high-quality new project opportunities in the Lower 48 states.” Savant’s primary project development focus outside Alaska has been unconventional resource-based projects, including basin-centered gas, tight gas, coalbed methane and fractured shale gas. Savant said it “also generates high impact exploration prospects as well as selectively acquiring producing properties.”
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