Arctic Fortitude leases expire

Appeal ruling concludes a decade of legal and regulatory disputes over North Slope unit; Armstrong and Buccaneer make deals

ERIC LIDJI

For Petroleum News

The three leases in the former Arctic Fortitude unit expired in late June.

The expiration of the leases - ADL 389177, ADL 389178 and ADL 389179 - is retroactive to May 2012, when the state officially terminated the North Slope unit following four years of legal disputes from the state and operator Alaskan Crude Corp.

The San Antonio-based independent challenged the ruling, which led to a series of appeals. Those appeals were recently resolved, allowing the leases to be resolved, too.

The Alaska Department of Natural Resources terminated the unit after Alaskan Crude failed to meet work commitments. The company accused state agencies of setting up “roadblocks” that had prevented the company from testing an old well on the leases.

A group of four 70 & 148 LLC leases expired at the end of their primary term at the end of May. The leases - ADL 391408, ADL 391409, ADL 391410 and ADL 391411 - are part of the large package of North Slope leases the Armstrong subsidiary has been exploring with Repsol E&P USA Inc. and GMT Exploration Co. Inc. The leases were west of the White Hills region and north of the foothills of the Brooks Range.

The state approved a request from 70 & 148 to transfer a 5.25 percent working interest and 4.2 percent royalty interest in approximately 74 leases to partner GMT Exploration, including the leases included in the Pikka unit in the Colville River Delta region.

The state also issued 10 leases on the North Slope to Armstrong Energy LLC. The company acquired the leases in a November 2015 lease sale on the North Slope.

The Alaska Department of Natural Resources is considering a request from Buccaneer Royalties LLC to transfer a 1.75 percent royalty interest in ADL 17595 and a 3.5 percent royalty interest in ADL 391904, ADL 391609 and ADL 391611 to WR Production LLC, and a separate request from WR Production to transfer a 3.5 percent royalty interest in ADL 391904 to Peregrine Energy LLC. The leases are part of the Kenai Loop field.

The state is also considering a request from the liquidating trust for Buccaneer Resources Ltd. to transfer a 0.875 percent royalty interest in three leases - ADL 18790, ADL 391900 and ADL 384403 - to BlueCrest Energy Inc. The leases are part of the Cosmopolitan unit, which operator BlueCrest Energy recently brought into production.

Also in Cook Inlet, the state is considering a request from the Double D Family Trust to transfer 0.75 percent royalty interest for 24 Kitchen Lights unit leases to Kay Rieck.

—A copyrighted oil and gas lease map from Mapmakers Alaska was a research tool used in preparing this story.