Thompson joins AVCG, Brooks Range Petroleum

Kay Cashman

Petroleum News Publisher & Managing Editor

Former ARCO senior executive Ken Thompson has invested in Alaska Venture Capital Group LLC and been named the fifth managing partner for the Kansas-based independent. AVCG, which holds 142,000 acres in oil and gas leases on Alaska’s North Slope, is owned by eight Kansas independent oil and gas companies — Thompson’s Alaska Energy Partners LLC is the first Alaska-based owner.

According to an Oct. 10 interview with AVCG managing partner Bo Darrah, Thompson will also serve as chairman of Brooks Range Petroleum Corp., a company AVCG formed earlier this year as a subsidiary to operate its Alaska leases. Darrah will continue serving as president and CEO of Brooks Range. “Edgar (Dunne) and I are elated to have Ken working with us side by side,” Darrah said.

In an Oct. 11 interview, Thompson said his key role at Brooks Range will be “overseeing strategy, providing input on exploration prospects and future leasing, and I will continue to build relationships with partners in the state.”

He said one of the things that attracted him to AVCG and Brooks Range was their “promising” prospects, including “a couple of past ARCO prospects that I was familiar with.”

Thompson was also attracted to the idea of working with independents again.

“In my early years with ARCO, before I came to Alaska, ARCO was involved in many different areas of the Lower 48, including West Texas, Oklahoma, Louisiana, the Gulf of Mexico and the Rockies. … We partnered with a lot of independents. I enjoyed working with them. … Like in other areas, the independents are bringing new exploration ideas to the North Slope, along with a more cost-effective way to develop smaller fields. That’s the successful niche the independents have always had in the oil and gas business.”

Another thing that attracted him to the Kansas group was the performance of the eight independents that own AVCG: “They have a great track record in Kansas and other areas and they have some fresh ideas on exploration and development. Plus, they are just downright fun to work with!”

One of the problems AVCG has had in attracting capital for their North Slope projects, Thompson said, was the lack of North Slope operating experience.

“I certainly bring that to their partnership,” he said, referring to his four years as ARCO Alaska’s president from 1994-98.

“I bring North Slope experience and they bring a fresh way of looking at things. I have seen that be successful in other basins where the majors were de-emphasizing investment as they search for giant fields elsewhere. It’s going to be exciting,” he said. “It reminds me of the days when Atlantic Richfield was just an independent company that didn’t give up exploring on the North Slope … that independent persistence paid off in the discovery of Prudhoe Bay and Kuparuk.”

AVCG and Brooks Range Petroleum remind Thompson in other ways of ARCO, which has since been merged with BP and its Alaska assets sold to Phillips, now ConocoPhillips: “AVCG and Brooks Range Petroleum have high values, a concern for the environment, an entrepreneurial work environment for employees and we will exhibit good corporate citizenship — very much like ARCO.”

But he also wants to “learn from the great legacy of these Kansas independents; to do things in the most cost-effective way, while maintaining our values,” Thompson said.

The company’s “key strategies” are achieving environmental and safety excellence, monetizing its prospects and acreage, and trying to improve the cost structure of drilling and development on the North Slope.

“You’ve got to have environmental and safety as top priorities if you’re going to operate on the slope and we do have the vision of eventually being one of the quality operating companies on the North Slope,” Thompson said.

Monetizing prospects, he said, will be done by “partnering with other independents and the majors, too.”

Lowering costs “will be achieved by utilizing newer technologies. … We’re working with ASRC Energy Services, for example, on new concepts such as smaller-scale and skid-mounted production systems – what we call ‘micro-processing units,’” he said.

Thompson will continue in his role with Pacific Star Energy LLC, an Anchorage-based company he formed to give Alaskans a vehicle for equity investment in a natural gas pipeline from the North Slope to outside markets.

“That effort is continuing and is a very high priority for me, especially now that our delegation secured passage of significant federal incentives for the gas line” he said.