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Bow Valley spent $16.3M in Alaska in 2007 Over the past 18 months the independent has grown presence in Alaska, but focus remains on North Sea exploration projects Eric Lidji Petroleum News
Bow Valley Energy Ltd. spent $16.3 million on Alaska projects in 2007, including $2.15 million in the fourth quarter of the year, as part of a $196.6 million companywide capital program, according to annual filings released on March 10.
After arriving in the state in late 2006, the independent significantly increased its presence in Alaska in 2007. Through a local subsidiary, Bow Valley Alaska Corp., the Calgary-based independent oil company is part of a joint venture exploring two North Slope properties this winter.
Of the capital expenditures for 2007, $14.4 million went toward drilling two exploration wells and acquiring seismic data. The remaining $1.9 million was “capital related to the 2008 winter drilling program.”
Although Bow Valley did not sell any oil from Alaska properties in 2007, the company received $2.4 million from the state through refunds related to tax credits earned for exploration expenses from 2006 and the first half of 2007.
Bow Valley plans to spend $13 million on exploration projects in Alaska this year, as part of a $110 million to $115 million capital budget.
Alaska major part of Bow Valley portfolio Arriving in October 2006, Bow Valley was the last of four companies to enter a joint venture.
Brooks Range Petroleum Corp., a wholly owned subsidiary of Alaska Venture Capital Group, is running the winter exploration program on behalf of the joint venture, which also includes TG World Energy Corp. and Nabors affiliate Ramshorn Investments Inc.
Bow Valley is paying 28.57 percent “of certain capital costs” to earn a 20 percent working interest in “certain lands owned by the joint venture group,” which comes to around 59,200 acres of the nearly 296,000 acres owned by the joint venture.
The 2007 exploration program included one dry hole and North Shore No. 1, which the joint venture returned to this year. In addition to re-drilling North Shore No. 1, this winter the joint venture drilled the Tofkat No. 1 well, which they plan to sidetrack.
When Bow Valley arrived in Alaska in 2006, Robert G. Moffat, Bow Valley president and chief executive officer, called the joint venture “a first step in establishing Alaska as a major production and revenue contributor to Bow Valley’s operations.”
“Participation in this joint venture represents a major initiative to expand the company’s business into new international jurisdictions,” Moffat said at the time. “Alaska is a politically stable jurisdiction, it has an attractive fiscal regime and there is significant exploration potential remaining within close proximity to existing infrastructure.
In the March 10, 2008, filing, Bow Valley noted, “The fiscal regime was recently changed, and it is possible that government authorities may make further changes in the future.”
Started in 1996, Bow Valley originally focused on properties in western Canada, but sold those assets last year to focus on exploration programs in the North Sea and Alaska.
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