|
Forest sells Alaska assets California independent Pacific Energy says Cook Inlet will be core area Kay Cashman Petroleum News
On May 29, Denver-based Forest Oil announced the sale of its remaining Alaska assets to Pacific Energy Resources for approximately $464 million. Pacific Energy, a new player in the state, told Petroleum News its soon-to-be-acquired Alaska assets will “become a core area” for the Long Beach, Calif.-based independent.
Pacific Energy currently produces about 3,000 barrels of oil per day in California, two-thirds of which comes from three offshore platforms in the federal waters of San Pedro Bay. The Alaska assets it is buying from Forest are producing about 5,900 barrels of oil equivalent per day, Pacific Energy said.
Pacific Energy also has an agreement with Shell and Wolverine that entitles the group to explore and develop oil and gas interests in the Pacific Creek area of Wyoming’s Green River basin.
Plans to pour money into Alaska In a May 29 interview with Petroleum News, Pacific Energy President Darren Katic said the Alaska acquisition fits his company’s business model which is “looking at older fields that we perceive have lots of upside … but are undercapitalized for various reasons, perhaps because they’ve been passed around in mergers, so they are non-core areas for larger companies. … We see these Cook Inlet assets as fantastic assets that need to be somebody’s core properties. Our intention is to pour a lot of money in the proven, undeveloped reserves.”
The Alaska purchase, which includes Forest Oil’s wholly owned subsidiary Forest Alaska Operating, will be retroactive to Jan. 1, 2007, and is expected to close June 30, “subject to customary closing conditions and adjustments,” Forest said. The company’s assets consist of shares of nine Cook Inlet basin fields, a 40 percent interest in Cook Inlet Pipeline Co., and almost 1 million exploration acres in the Cook Inlet and Susitna basins of Southcentral Alaska. Forest’s tiny interest in the North Slope Prudhoe Bay unit was also up for sale, but a Petroleum News source at the company said that asset was acquired earlier in the year by Forest’s Prudhoe partners.
The $464 million acquisition price Pacific Energy is paying includes $380 million to repay Forest Alaska Operating’s term loans, cash of about $68 million to be paid to Forest, and 5.5 million shares of Pacific Energy common stock to be issued to Forest at its current value of approximately $16 million.
Expects to keep most Alaska employees Katic told Petroleum News he expects to keep many of Forest’s Alaska employees: “We don’t have any infrastructure in Alaska, so we’re looking at keeping the vast majority of the people who are interested in staying, particularly the people who work on the facilities themselves.”
The company has not yet met with any Forest employees, he said.
When asked if Pacific Energy had selected a person to head its Alaska operation Katic said, “We have a couple of candidates we’re looking at to run the operation,” but he also said keeping Forest’s top man in Alaska, Leonard Gurule, was something he was open to. As of May 29, he had not yet talked to Gurule.
Staffing in Alaska is “in its infancy stages,” Katic said.
Katic and his people expect to make a visit to Alaska in the very near future — “probably within the week,” he said.
Corsair a high-priority; will be talking to Escopeta The Alaska acquisition includes “significant undeveloped acreage with multiple high quality exploration targets, including Corsair, which alone has 200 million-barrel potential (and) provides large exploration upside,” Katic said.
He said the offshore prospect was “a high-priority” drilling prospect for his company.
Corsair lies on the same anticline as ConocoPhillips’ North Kenai gas field, the known oil pool in Renaissance Alaska’s Northern Lights prospect and Escopeta Oil’s Kitchen prospect.
In its Corsair unit application last year Forest told the state it had “identified large seismic amplitude anomalies located in the center of the Upper Cook Inlet approximately 12 miles southwest of the North Cook Inlet field.” The prospect occurs in a feature some 2.5 miles wide and nine miles long that “lies on structural trend with the North Cook Inlet field.”
In 2003 Forest said the prospect could contain as much as 480 billion cubic feet of natural gas.
The exploration of offshore prospects such as Corsair would require a jack-up rig, something Escopeta and Forest proposed in their 2006 unit exploration plans. Escopeta President Danny Davis has been working to bring a jack-up rig to Cook Inlet, and Katic told Petroleum News he expected to be talking to Davis in the near future.
When asked what Katic thought of the Redoubt Shoal field, which has proven to be a disappointment to Forest, he said his company “did not put a whole lot of value on it.”
| 