Providing coverage of Alaska and northern Canada's oil and gas industry
November 2023

Vol. 28, No.47 Week of November 19, 2023

DNR OKs Lagniappe land use permit for eastern North Slope exploration

Kay Cashman

Petroleum News

On Nov. 10, the Alaska Department of Natural Resources' Division of Oil and Gas approved Lagniappe Alaska LLC's five-year land use permit for offroad travel and ice construction, which the company had applied for on Oct. 4 for the "Lagniappe Exploration Program" on the eastern North Slope. Lagniappe is an Armstrong Oil & Gas company.

The general use permit authorizes Lagniappe to conduct the activities on state of Alaska land and waters between the Colville and Canning Rivers, subject to the conditions of the permit, which is effective Nov. 10, 2023, through Nov. 10, 2028. Specific projects will be reviewed and approved on a case-by-case basis.

Exploration activity for the five-year permit is expected to begin this month. Lagniappe will drill six wells with a maximum of three wells per year. The wells will be drilled on the Lagniappe-operated lease block south of the Badami unit, which encompasses 148 leases on 270,000 acres. The company hopes the exploration program will take no more than two consecutive years.

The first winter mobilization, expected to be this winter, will transport and deliver the Doyon 141 drilling rig to the King Street-1 well, the Nabors 105 drilling rig to the Voodoo-1 well, and Sockeye-1 well.

Winter mobilization will be conducted via an overland ice road route originating from the existing gravel Endicott Road. A 500-foot by 785-foot temporary staging and offroad pad, constructed of ice, will be built near the origin of the project ice road to support mobilization efforts. A semicircular ice road turnout, approximately 200 feet long by 20 feet wide, will be constructed on the north side of Endicott Road (at the Lagniappe ice road origin) to support wide vehicle turn access.

Agency, public review

The division provided an agency review and comment opportunity for the permit. The following government entities were notified on Oct. 9: U.S. Army Corp of Engineers, Alaska Department of Environmental Conservation, Alaska Department of Fish and Game, Alaska Department of Natural Resources' Division of Mining, Land & Water and the North Slope Borough. The comment deadline was 4:30 p.m. Alaska time on Oct. 23.

No comments were received.

Public notice was posted on the division's website and the state of Alaska Online Public Notice System on Oct. 9, with a comment deadline of 4:30 p.m. Alaska time on Oct. 23. One timely comment was received and resolved.

Lagniappe has provided the division with a performance guarantee under 11 AAC 96.060 in the amount of $300,000.

Previously reported in PN

In line with its Alaska strategy to focus on the big Pikka development west of the central North Slope, Santos said Sept. 19 that it is "farming down" half of its working interest in the 148 lease block it shares with Lagniappe on the eastern North Slope.

Once an agreement with APA Corp. (holding company for Apache Corp.) and Armstrong Oil & Gas's Lagniappe is executed, Santos' working interest will be 25%.

Under the terms of the deal, initial activities during the exploration phase will be undertaken without cost to Santos.

A spokesperson for APA's Apache Corp. told Petroleum News that Bill Armstrong's Lagniappe Alaska will be the operator of the acreage.

The lease block, Santos said, contains "multiple prospects in the late Cretaceous Brookian and Schrader Bluff formations."

Although Bill Armstrong will not comment on the Sept. 19 agreement with Santos and APA, on March 30 after Lagniappe had begun permitting for the area, he told Petroleum News in a text that the exploration wells will target Brookian objectives -- "Pikka look-a-likes that are defined off of high effort, reprocessed modern 3D. Really exciting stuff. Big targets."

There has been "virtually no prior drilling in the area. The wells that have been drilled have great shows and some have bypassed pay on old logs," Armstrong added.


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