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Trading Bay/U.S. Petroleum Cook Inlet deal unwinds Deal required drilling at properties on west side of Cook Inlet; Trading Bay’s owner Paul Craig has other parties looking at prospects Steve Sutherlin PNA Managing Editor
U.S. Petroleum Corp. of Vancouver, British Columbia, has pulled out of an agreement to buy all of the Cook Inlet working interest holdings of Trading Bay Energy Corp., Paul Craig, 100 percent owner of Trading Bay told PNA Oct. 29.
“Following the completion of due diligence, U.S. Petroleum Corp. has elected not to complete the purchase of the Hanna and Marie prospects from Trading Bay Energy Corp. and Dr. Paul L. Craig,” U.S. Petroleum said in a September statement.
The 1,156-acre Marie Prospect is on the northwest boundary of the Beluga River gas field on the west side of Cook Inlet, Craig said. The 7,040-acre Hanna Prospect is adjacent to the Pretty Creek unit to the south, Lewis River unit to the north and Ivan River unit to the east.
Craig told PNA that U.S. Petroleum pulled out of the deal at the last minute. Craig’s broker in the transaction, Rod Copeland, CEO of Roco Petroleum Inc. of Abilene, Texas, had even flown into Anchorage for closing, Craig said.
“The closing date was Sept. 12, and on Sept. 11 they were posturing as if they were going to close,” he said.
The agreement to sell was predicated on issuance of the leases by the state Division of Oil and Gas, and the leases were issued by the closing date, Craig said.
“DOG was very helpful,” he said. “On my end everything was ready.”
Agreement stipulated drilling Craig said the agreement stipulated that drilling be done, and perhaps it is just as well it didn’t close because if U.S. Petroleum didn’t have funds to complete the purchase, it might also be unable to complete a drilling program.
“It doesn’t appear that U.S. Petroleum had the financial muscle to develop the leases,” Craig said.
Craig said under the agreement, he would have retained an overriding royalty interest in the leases.
“My interest is in getting these leases drilled and developed,” he said.
Steve Summar, an independent Tulsa-based oil and gas producer/operator acting as a broker for U.S. Petroleum in the transaction told PNA in June that U.S. Petroleum is a participant but not an operator in Oklahoma and Texas region drilling ventures. It is a public company and trades on the U.S. over-the-counter market under the symbol USPT.
U.S. Petroleum says it will close on another property U.S. Petroleum said in its September statement that it still intends to close on a separate Cook Inlet transaction with Warren Buck, for a lease near the Marie prospect.
“U.S. Petroleum Corporation does intend to complete the purchase from Warren Z. Buck of lease ADL 389208 comprising 520 acres located on the northeast boundary of the Beluga River Unit gas field,” the company said.
U.S. Petroleum said a geology report from Erik A. Opstad estimates potential reserves attributable to the 520-acre tract at 29.03 billion cubic feet of gas and 4.375 million barrels of oil.
Craig said he now has other parties looking at the Hanna and Marie prospects. He has no current plans to drill or conduct seismic testing on the properties.
For information on U.S. Petroleum Corp. visit: www.uspt.info
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