Armstrong Alaska, the small independent instrumental in bringing three new oil companies to Alaska in less than three years, has sold all of its oil and gas leases (see above story) in Alaska to the last of those three new companies, Eni Petroleum Exploration Co., but Armstrong is staying in Alaska.
“We’re definitely not leaving Alaska,” Armstrong Oil & Gas President Bill Armstrong told Petroleum News after the sale of Armstrong Alaska’s assets to Eni Petroleum, an affiliate of Italy’s Eni SpA, in mid-August. Armstrong Alaska is an affiliate of Denver-based Armstrong Oil and Gas, and Bill Armstrong is president of both companies.
“We were not capitalized enough to do the things our North Slope partners Pioneer Natural Resources and Kerr-McGee wanted to do. They’ve both been incredibly great partners for us. It was important to me not to slow them down and be a drag on development at Oooguruk and Nikaitchuq, so we sold our assets to Eni,” he said.
“Eni will be a great asset to Alaska,” he said.
Bill Armstrong says Armstrong Alaska will stay in the state and continue to put together exploration prospects.
The company, he said, will continue to focus on northern Alaska. “We still see huge opportunities on the North Slope. … It’s a great place to be and it’s a great petroleum system.
“There are certain things we’re pursuing. We’re really looking forward to continuing our relationship with all the players on the North Slope and the State of Alaska,” Armstrong said.
“There were a lot of companies interested in what we had in Alaska. I think you’ll see more companies coming to the North Slope” in the near future, he said.
Track record of success
Armstrong Alaska shouldn’t have a problem attracting partners for new prospects as its track record to date has been three out of four — i.e. in three out of four North Slope prospects drilled by its first two partners discoveries have already been announced — first at Oooguruk by Pioneer in 2003 and then by Kerr-McGee at Nikaitchuq in 2004 and again by Kerr-McGee in 2005 at Tuvaaq and nearby Kigun, a well in the Kuparuk unit that essentially confirmed the Tuvaaq discovery.
There has been no news yet from Kerr-McGee on drilling this past winter at the Two Bits prospect (also called Ataruq). The company has said it is still evaluating well results.
Pioneer and Kerr-McGee are moving toward development of Oooguruk and Nikaitchuq, respectively. If sanctioned by both companies (and their new partner Eni), Nikaitchuq is expected to come online in the first half of 2006 and Oooguruk in 2007. (Both Pioneer and Kerr-McGee have said they need royalty relief from the State of Alaska to approve their projects.)
The lead players in Armstrong’s Alaska team are Bill Armstrong, Vice President of Operations Stu Gustafson, Vice President of Geoscience Matt Furin, and Vice President of Land Ed Kerr.
The company’s philosophy in Alaska was summed up by Gustafson in a 2004 speech in Anchorage when he said Armstrong’s mantra is, “Smoother, faster, better, cheaper: everyday that’s what we try to do.”
