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June 2019

Vol. 24, No.25 Week of June 23, 2019

Oil patch insider: Caelus drops 13 of 25 leases from Oooguruk prior to Eni takeover; Wulff, Balash to speak at RDC

Kay Cashman

Petroleum News

An interesting step in Eni Petroleum’s takeover of operatorship and full ownership of the Oooguruk oil field took place on June 17 when the state of Alaska allowed Caelus Natural Resources to drop 13 leases in which it has a 100% interest from the southern half of the unit.

In a letter to Caelus Senior Vice President Pat Foley, the Division of Oil and Gas approved the voluntary unit reduction from 25 to 12 leases because no participating area exists in the contraction area and none of that acreage is producing oil or gas.

Although the 13 leases being pulled from the unit are past their primary term, the division said they will be extended an additional 90 days from the contraction date. (Stay tuned, as this might give Caelus time to sell those leases to Eni or another company, so an announcement might already be in the wind.)

A 30% working interest owner in the North Slope unit, Eni announced the deal to acquire Caelus’ 70% interest in Oooguruk in January. Obviously, that purchase did not include tracts in which Eni did not have any ownership.

The division said an application to assign all working interest in the unit to ENI is pending with the agency.

This unit contraction approval “does not relieve Caelus from its obligations under the individual leases, including to remove all machinery, equipment, tools and materials, and to deliver up the leased area in good condition,” the agency said, further noting acreage in the contraction area will be governed by non-unitized lease language and regulation.

The division in its approval letter to Caelus also said the Oooguruk unit’s automatic 10-year contraction “has been delayed as a result of Caelus’s request dated Oct. 12, 2017,” which was not available on the agency’s website in time to be included in this report.

POD extended for Oooguruk

The contraction approval for Oooguruk followed a June 4 decision from the division to extend the unit’s 12th plan of development from Sept. 1, 2019, through Feb. 29, 2020.

During the 12th POD Caelus said it would maintain production from Oooguruk. Three rig workovers were planned to replace electric submersible pumps with gas lift completions and do wellbore repairs. Those activities were conducted as planned, the division said.

And because Caelus is in the process of divesting its interest in the unit and subsequently relinquishing operator responsibilities, the company has not proposed future work. Instead, Caelus requested and was granted an extension of the existing approved 12th POD so the future operator, in this case Eni, can develop its own plans for the 13th POD.

That POD will be due Dec. 1, the division said.

- KAY CASHMAN

RDC’s annual luncheon June 26

Oil Search’s top executive in Alaska, Keiran Wulff, and Joe Balash, assistant secretary of Land and Minerals Management at the U.S. Department of the Interior, are the keynote speakers at the Resource Development Council’s annual luncheon in Anchorage on June 26.

The event will open with remarks from Alaska Gov. Mike Dunleavy.

The event will be held at the Dena’ina Center and doors will open at 11:15 a.m. The program begins at 12 noon and ends by 1:15 p.m.

To make reservations check out RDC’s website at https://www.akrdc.org/annual-membership-luncheon.

- KAY CASHMAN






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