A joint venture exploring the North Slope is postponing a major exploration program planned for this winter until it can resolve a legal dispute between two of its partners.
Brooks Range Petroleum Corp. operates the multiyear exploration program on behalf of several smaller companies, but said on Jan. 30 that it would delay that program one year.
BRPC, the local subsidiary of Kansas-based Alaska Venture Capital Group, is in a legal dispute with TG World Energy Corp., a Calgary-based independent with a 35 percent share in most aspects of the joint venture, including drilling expenses and many leases.
The dispute began late last year after TG World postponed its “drilling and development programs” planned for this winter, citing global economic uncertainty and low oil prices.
The joint venture is in the process of permitting three prospects in Gwydyr Bay, a coastal area north of the Prudhoe Bay unit where the companies have drilled in recent winters.
Early last fall the joint venture laid out plans for two wells and possibly a sidetrack this winter in the North Shore and Sak River prospects, where it drilled in previous years. Recently it began permitting a prospect called West Shore.
In a statement, BRPC said it “has decided to defer its planned exploration activity this winter to the 2010 winter season. BRPC is in litigation with one of its partners and the issues in the litigation need to be resolved prior to commencing its planned exploration activity and such issues cannot be resolved in time for the 2009 winter season.”
However, the company added that it “anticipates an active 2010 winter exploration season” and “plans to proceed with permitting, rezoning, and unitizing the proposed North Shore Development Project in the Gwydyr Bay area.”
Funding is not an issueIn October 2008, BRPC said it had the funds to press forward on its winter exploration program despite tightening credit markets that made life hard for smaller companies.
But in December, two partners in the program showed signs of trouble.
First, BRPC took over the 20 percent interest of Calgary-based Bow Valley Energy Ltd. in the Gwydyr Bay prospect. The state recently approved a swap between the companies.
Then, TG World postponed drilling work because of economic uncertainties. Last summer, the company said it had raised some $25 million, enough for two drilling seasons.
TG World declined to comment on its plans or partners in Alaska.
The fourth partner in the program is Nabors subsidiary Ramshorn Investments Inc.