A troubled Southwest Alaska electric power cooperative says it has a deal to sell its geothermal drilling rig to oilfield service company Baker Hughes.
The deal could send the rig to work in the Cook Inlet basin. But the transaction is contingent on U.S. Bankruptcy Court approval.
The co-op, Naknek Electric Association, has been operating under Chapter 11 bankruptcy protection from creditors since September 2010. It filed for bankruptcy due to financing difficulties associated with its geothermal exploration effort.
Naknek Electric bought an oil and gas rig, a National 1320 model, to conduct its geothermal drilling. The utility managed to drill only one well, which experienced serious technical problems.
The co-op on July 20 filed a motion seeking the court’s permission to sell the rig and accessories to Baker Hughes.
The sales price would be $1 million cash, far below the $8.5 million Naknek Electric paid for the rig and nowhere close to co-op’s tens of millions of dollars in debts.
But the sale would benefit the co-op well beyond the $1 million sale price, as Baker Hughes would drop nearly $4.5 million in lien claims.
—Wesley Loy

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