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Polar Petroleum picks up leases The independent is buying 17 North Slope leases from Donkel, Cade and must drill a well within two years; company new to oil Eric Lidji For Petroleum News
A pair of longtime players in the Alaska oil industry has sold a selection of its North Slope oil prospects to a newly formed independent called Polar Petroleum Corp.
The Alaska-based company recently purchased 17 leases totaling some 46,399 acres in the Franklin Bluffs and Hemi Springs regions of the North Slope from independent investors Daniel K. Donkel and Samuel H. Cade for $1.25 million, with $150,000 due at closing and the remainder “due in accordance with the terms of a promissory note.”
The deal requires Polar Petroleum to drill a “test well” of 8,000 feet or deeper on one of three pre-determined leases in the Hemi Springs prospect within two years of closing. If the company fails meet the deadline, it would forfeit all three leases back to their original owners. The filings to date have not specified which leases are being targeted for drilling, but the prospect covers 16 leases along the southern border of the Prudhoe Bay unit.
The Hemi Springs prospect is near the former Rock Flour and Northeast Storms units, as well as the former Hemi Springs unit covering part of the current leasehold. There have been numerous wells previously drilled in the area, including the ARCO Hemi Springs State No. 1, which the state certified as capable of producing in paying quantities in 1984.
After drilling its well, Polar Petroleum must assign a 20 percent working interest to the sellers. The deal already includes a 4 percent overriding royalty interest for the sellers.
The Franklin Bluffs prospect covers a single lease some 20 miles further to the south, and Polar Petroleum is touting the potential of potential shale oil exploration in the region.
The prospect is near former White Hills exploration and current source rock exploration.
Both prospects are located near the trans-Alaska oil pipeline and the Dalton Highway.
New to oil industry Polar Petroleum was incorporated in Nevada in March 2011 under the name Post Data Inc. and in its annual filings from June 2012 the company intended “to destroy and recycle electronic devices in Edmonton, Alberta, Canada, in a manner which ensures the confidential destruction of all previous user data.” Following a change in management in July 2012, Post Data “entered into the oil and gas business to engage in the exploration, development and production of oil and gas properties primarily in the State of Alaska.”
It formed an Alaska subsidiary called Polar Petroleum (AK) Corp. in late August 2012.
Polar Petroleum is being led by recently appointed President and CEO Daniel Robert Walker, who comes to the job from a previous position in the Australian seismic industry and management positions in the agriculture and mining sectors in the U.S. and abroad.
In its quarterly filings from February 2013, Polar Petroleum valued its total assets at some $1.4 million, mostly coming from its properties but with some $125,000 in cash.
The promissory note attached to the sale comes with an annual interest rate of 0.3 percent and is payable in installments of $125,000 every three months for the first year, $100,000 every three months thereafter and a final payment of $300,000 due by Oct. 31, 2014.
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