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State extends Placer unit until Quokka decisions are in
Kay Cashman Petroleum News
As reported in the April 10 issue of Petroleum News, on April 1, ASRC Exploration, or AEX, operator of the North Slope Placer unit, sent a letter to Derek Nottingham, director of Alaska’s Division of Oil and Gas, requesting an extension of the Placer unit’s fifth plan of development and a corresponding extension of time to submit the sixth POD. The six-month extension to Dec. 31, 2022, was tied to Oil Search’s application to form the Quokka unit, which includes the Placer leases.
On April 19, Nottingham approved AEX’s request.
In his notification letter to Erik Kenning, AEX senior director of lands and natural resources, he provided the following background:
* The fifth Placer unit’s POD period was originally set to expire on Dec. 31, 2021.
* On Dec. 8, 2021, however, the division approved AEX’s initial request to extend the fifth POD period through June 30, 2022, due to the pending Placer lease assignment to Oil Search (Alaska), operator of the proposed Quokka unit.
* On Dec. 30, 2021, the division received an application to form the Quokka unit from OSA. An exhibit in that application listed the Placer leases followed by an asterisk stating, “Assignment of Working Interest from AEX, pending.”
* The proposed unit area, shown on Exhibit B of the Quokka application, includes the Placer unit. Due to the pending assignment applications, AEX joined the proposed Quokka application as a working interest owner.
* The assignment applications and Quokka application are currently being adjudicated and separate decisions will be issued for each.
AEX requested the additional six-month extension of the fifth Placer POD period due to the pending applications.
FINDING AND DECISION
“When considering a POD, the Division must consider the criteria in 11 AAC 83.303(a) and (b),” Nottingham wrote.
“Accordingly, the Division considered the public interest, conservation of natural resources, prevention of economic and physical waste, protection of all interested parties including the state, environmental costs and benefits, geological and engineering characteristics of reservoirs or potential hydrocarbon accumulations, prior exploration activities, plans for exploration or development, economic costs and benefits to the state, and any other relevant factors, including mitigation measures. 11 AAC 83.303(a), (b).”
In approving the prior PODs for the Placer unit, Nottingham wrote in his decision letter to Kenning, that the division “considered the 11 AAC 83.303(b) criteria and found that the PODs promoted conservation of natural resources, promoted prevention of waste, and protected the parties’ interests.”
In its April 19 decision, Nottingham incorporated those findings by reference.
Finally, the sixth Placer POD is due Oct. 3, 2022, 90 days before the fifth POD expires.
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