May 01, 2008 --- Vol. 14, No. 46May 2008

State of Alaska denies expansion of Corsair unit

The state of Alaska has denied a request to more than double the size of the Corsair unit in the waters of Cook Inlet, arguing that expanding the unit would be like “warehousing” undeveloped leases.

California-based Pacific Energy Resources Ltd. made the request in March, hoping to keep three leases in the area from expiring at the end of April.

The company wanted to expand Corsair to both the north and south, adding four state leases to the unit. The expansion would have added 16,546 acres, bringing the total acreage to 26,731.

But because Pacific Energy has yet to drill any exploration wells on its leases around Corsair, the state Division of Oil and Gas said expanding the unit “amounts to warehousing of the proposed expansion lease acreage.”

Pacific Energy is the operator and sole working interest owner of Corsair, having acquired the leases from Forest Oil Corp. in 2007.

At the end of last year, the state gave Pacific Energy 90 days to either secure a drilling rig for an exploration program or lose the unit. The company did enough to assure the state before that deadline, and on April 15 news broke that Blake Offshore and Pacific Energy had signed a three-year deal to bring a jack-up rig to Cook Inlet.

Pacific Energy plans to drill three wells by the end of 2009 and possibly a fourth by the end of 2011. The three initial wells would all be on acreage within the existing boundaries of the Corsair unit.

With the decision not to expand Corsair, three of the four Pacific Energy leases now expire and will become part of the May 2009 state lease sale for Cook Inlet.

Pacific Energy has until May 20 to appeal the decision.

Although now moot, the state received a comment from Renaissance Alaska LLC in regards to the request by Pacific Energy. Renaissance said it had “identified certain oil reservoirs and potential hydrocarbon accumulations that may extend onto the proposed area to be included in the Corsair unit.”

Editor’s note: See story in May 11 issue of Petroleum News, available to subscribers online at noon, Friday, May 9, at

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