TG World Energy, AVCG/Brooks Range form Alaska North Slope JV
Calgary-based TG World Energy Corp. has announced formation of a joint venture with Brooks Range Petroleum Corp., a wholly owned Alaska subsidiary of Kansas-based Alaska Venture Capital Group LLC. Since 1999 AVCG has established a substantial lease position on Alaska’s North Slope; Brooks Range Petroleum operates all of AVCG’s interests and services.
Former ARCO Alaska President Ken Thompson is managing director of AVCG while John Jay “Bo” Darrah, an AVCG managing member, is chairman, president and CEO of Brooks Range Petroleum. TG World said Brooks Range is the operator of the new joint venture.
TG World has acquired an interest in most of AVCG’s oil and gas leases and has agreed to participate in the exploration and development of the leases. The companies have also agreed on a joint venture alliance for the exploration of an “area of mutual interest” onshore and offshore “between NPR-A in the west and ANWR in the east and in which BRPC/AVCG currently has no petroleum lease ownership.”
The joint venture went into effect March 18, subject to finalizing the joint operating agreement in 10 days. The initial joint venture term is four years, but the joint venture will continue after the initial term, unless either company terminates it.
“Our entry is a major growth step for TG World,” said Clifford James, president and CEO of TG World, “It is a strategic step that brings balance to our other major asset, our Tenere Project in Niger.” Exploration program In January Thompson said AVCG had a three-year exploration program in five prospects on the North Slope. The company owns a 10 percent working interest in the Cronus prospect that Pioneer Natural Resources is drilling this winter.
According to TG World, the new joint venture is exploring properties that “can be grouped into seven highly prospective play/lease areas,” including Gwydyr Bay, Itkillik, Ocean Point, Slugger, Southland, Titania and Whiskey Gulch. Thompson has described most of these prospects as being in the “the billion-dollar fairway,” a particularly prospective area west and southwest of the Kuparuk River and Milne Point units (see “AVCG set to explore slope” in the Feb. 5 edition of Petroleum News).
TG World says that the joint venture is planning to shoot 3-D seismic and drill four wells over an initial four-year exploration program, at a total estimated cost of US$46.9 million, with its share US$17 million, payable in stages. TG World can elect not to participate in any part of the planned program, in which case the company will forfeit its property rights in the lands involved in that part of the program.
The planned exploration program includes a 3-D seismic survey in the 2005-2006 exploration season, followed by a second 3-D survey, the drilling of the first well and the acquisition of more leases in the 2006-2007 season, according to TG World.
—Alan Bailey
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