NEWS BULLETIN

December 10, 2019 --- Vol. 25, No.54December 2019

Alliance drops Guitar unit, acreage released

On Oct. 18, Alliance Exploration emailed the Alaska Department of Natural Resources' Division of Oil and Gas relinquishing the Guitar unit and surrendering leases ADL 391544, 391545 and 392104. Four days later, the division sent Alliance a letter confirming that the unit had been terminated and the leases surrendered, as well as notifying Alliance that the division would contact US Specialty Insurance by Nov. 1 about releasing the statewide bond posted by Alliance and which the company wanted refunded.

The company's unit termination and lease surrender email came in after the Sept. 16 cutoff date for the three Guitar leases to make it into the state's Dec. 11 lease sales, but they will be offered in the next North Slope lease sale, which is currently scheduled for approximately a year from now.

In Alliance's plan of exploration, approved by the division in 2017 in conjunction with the formation of the Guitar unit, the company promised to drill a well in the winter of 2018 or 2019, which was why the statewide bond was required.

Alliance did not meet its work commitment and so the unit was put into default by the state.

Although it did not cure the default, the division approved a new plan of operation filed by Alliance for drilling the well this coming winter.

The well was to penetrate the Ivishak, the formation that hosts the adjacent Prudhoe Bay reservoir, with a lateral well targeting a seismic anomaly in the Kuparuk C.

Positive results from the first well would trigger a plan for delineation drilling, Alliance said in its plan.

Oil potential indicates an upside of 200-300 million barrels, an Alliance executive previously told Petroleum News.

In June, Alliance said it had finalized a lease transfer document and production sharing agreement with ConocoPhillips on the Hemi Springs lease, which sits at the northwest quadrant of what, with the three Guitar unit tracts, had formed a square shape.

Though it appears Alliance is out of the picture with the Guitar unit and its three leases there are still some matters with the Hemi Springs lease, ADL 28249, left unresolved that will likely be worked out between ConocoPhillips and the division.

- KAY CASHMAN

Hilcorp takes on exploration for Doyon

Doyon Ltd. said in a statement yesterday that it has signed an agreement with Hilcorp for renewed oil and gas exploration in a portion of the Yukon Flats.

Doyon said the agreement covers 1.6 million acres of Doyon owned mineral rights in the Yukon Flats subregion where the Native corporation has a long-term interest in oil and gas potential. There are more than 10 million acres in the greater Yukon Flats area, much under federal ownership as part of the Yukon Flats National Wildlife Refuge.

The agreement with Hilcorp includes an initial airborne gravity survey of the region followed by the opportunity for seismic and drilling program, with the initial focus of exploration in the Birch Creek area, Doyon said.

"Doyon has been actively exploring for oil and gas resources in our region for over a decade," said Doyon Ltd. President and CEO Aaron Schutt. "We've barely scratched the surface."

"Our partnership with Doyon represents great opportunity for their shareholders and the State. We have worked successfully with Doyon over the years both in the Cook Inlet and on the Slope," David Wilkins, senior vice president, Hilcorp Alaska, said in yesterday's statement.

- KRISTEN NELSON

See stories in Dec. 15 issue, available Friday, Dec. 13 at www.PetroleumNews.com.

For information on PN's news bulletin service, call 907-522-9469.

PO Box 231651, Anchorage, AK 99523 - 1651


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