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Linc acquires Renaissance Umiat field; seismic, drilling planned
Linc Energy, the Australian independent which acquired Cook Inlet acreage last year and has already drilled its first well in the state, has now acquired the Umiat oil field on the North Slope and plans to fly a rig into the field for work this winter season.
Linc Energy Ltd., based in Brisbane, said June 16 that its wholly owned subsidiary Linc Energy (Alaska) Inc., has acquired a controlling interest in the Umiat oil field.
Umiat is on the southeastern border of the National Petroleum Reserve-Alaska, some 80 miles west of the trans-Alaska oil pipeline.
Linc said it acquired 100 percent of Renaissance Alaska LLC, which holds an 84.5 percent interest in Renaissance Umiat LLC, which holds a 100 percent working interest in the Umiat oil field and an 80 percent net revenue interest in the project.
Linc said the purchase price is $50 million plus adjustments for working capital, deposits and inventory. Linc said the 80 percent net revenue interest in the acquired leases is attributed net probable and possible reserves of 201 million barrels of oil equivalent with an estimated 1 billion barrels of original oil in place within the acquired Umiat lease area.
The Umiat field is in the western foothills/foldbelt province of the North Slope Foothills of Alaska, Linc said, and consists of 19,358 gross acres over three leases, two in NPR-A and two on adjacent state acreage.
State road plan significant Linc said a decision by the State of Alaska in December 2009 to build an all-season gravel road from the Dalton Highway to Umiat was a significant factor in the company’s decision to pursue the Umiat development opportunity. Current estimates are that the road would be some 92 miles long and construction could begin within the next 12 to 24 months and take some 18 months to complete. Linc said the State of Alaska and the U.S. Army Corps of Engineers have begun work on the federal environmental impact statement for the road.
Linc said it anticipates working closely with the state to permit and develop pipeline infrastructure between Umiat and the trans-Alaska oil pipeline in parallel with the Umiat road development, with the pipeline to be trenched into the road.
“The completion of this pipeline will mark the first significant all-season oil transport infrastructure into the southern part of the NPRA, opening up the area for further significant development,” Linc said.
Independent studies by NANA WorleyParsons LLC for Renaissance confirmed the viability of a cold pipeline buried in the road, Linc said, with a preliminary construction estimate of $207 million and a one season construction period.
Immediate plans Linc said that, subject to permitting, it plans to fly a drill rig into the Umiat airstrip and begin further drilling in the area this winter season. The company said it plans to shoot additional 2-D and 3-D seismic on the Umiat leases as soon as practicable and before this winter season.
Linc Energy Chief Executive Officer Peter Bond said the company’s decision to invest in Alaska “was greatly assisted by the availability of a number of generous State of Alaska incentives.”
“Linc Energy is extremely well positioned, with access to the necessary capital and resources, to take this project into production on an aggressive timetable,” Bond said. He called Umiat the “book-end” oil project the company plans to bring online over the next four years, and said it should contribute significantly toward Linc’s goal of reaching 100,000 barrels per day of production.
Completion of the Umiat transaction is scheduled for July 6, and the company said that to support development of Umiat “and future expansion plans in Alaska, Linc Energy will be significantly expanding its current Alaskan-based workforce over the coming months.”
The field Oil was discovered at Umiat in 1946 by the U.S. Navy, but not developed because of its remoteness from infrastructure, historically low oil prices and the lack of technology to unlock its shallow oil.
The discovery well, Umiat Test No. 3, was a vertical well with a measured depth of 572 feet; the reservoir at Umiat is between 200 and 1,400 feet, with a portion of the oil in permafrost.
The Alaska Oil and Gas Conservation Commission lists nine abandoned and three suspended wells at Umiat, all dating from the 1940s.
—Kristen Nelson
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