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Petro-Canada, Talisman expand North Slope presence
Kay Cashman Petroleum News Publisher & Managing Editor
Petro-Canada and Talisman Energy’s U.S. subsidiary Fortuna Energy increased their land position on Alaska’s North Slope at the June northwest National Petroleum Reserve- Alaska lease sale held by the U.S. Bureau of Land Management. (See June 6 article in Petroleum News.)
Both Calgary-based companies had a North Slope acreage position before the sale, but the $13,614,835 spent by Petro-Canada and the $26,480,300 spent by Talisman in the June sale represented more than a simple acreage increase.
For Petro-Canada the move into the oil-prone NPR-A was a big step beyond the speculative gas-prone acreage it began picking up three years ago in the foothills of the Brooks Range.
For Talisman, which farmed into Total’s NPR-A acreage last year as a minority partner, the June NPR-A sale leases represented its first acreage as an operator. Petro-Canada waiting on gas line, lawsuit One of the largest producers of natural gas in western Canada, Petro-Canada’s initial move across the border into Alaska was viewed as an extension of its natural gas activities in the Alberta foothills and Northeast British Columbia, where “geological prospects … are similar” to those in Alaska, a company representative told Petroleum News at the time.
The company said it wanted to get its foot in the door in case a North Slope gas line was built.
That same year Petro-Canada, a member of the Mackenzie Delta Explorers Group, was the first to drill a natural gas-exploration well in the delta in more than a decade. (Devon Canada was a partner in that discovery.)
Aside from filling in around its acreage in the May state foothills sale and doing some field work, Petro-Canada’s plan for its Brooks Range foothills acreage was to wait to see if a gas pipeline from the North Slope would be built to free the area’s stranded gas. (See May 30 article in Petroleum News.)
That changed when the company made a successful bid for NPR-A leases in June, although Petro-Canada might be playing a different kind of waiting game for its NPR-A acreage.
Petro-Canada spokeswoman Susan Braungart told Petroleum News that the “oil prime” NPR-A acreage would give the company an additional base for operations in Alaska and possibly something to work on “while we await news on a gas pipeline.”
She said, “We’re interested in Alaska because we continue to see the area as highly prospective for both gas and oil.”
Once the company has been assigned the leases it won in the NPR-A sale and if BLM wins a recent lawsuit filed by environmental groups against the northwest NPR-A sale, then Petro-Canada will decide what it wants to do with its NPR-A leases, Braungart said.
“We’re hopeful that once the leases have been issued that the BLM will have resolved any legal issues with the leases and we can continue interpretation efforts with the data available,” she said.
Derek Evoy, manager of frontier exploration for Petro-Canada, is in charge of the firm’s Alaska assets. Talisman expects to drill well in winter of 2005-06 While Talisman’s Fortuna faces the same lawsuit concerns, it still sees Alaska as a bright prospect in its group of international assets and expects to drill a well in NPR-A in the winter of 2005-2006.
David Mann, manager of investor relations and corporate communications for Talisman, told Petroleum News July 15, “The view within the company is that the next well we drill in Alaska will be in the winter of 2005-06.”
When asked if the well would be on the acreage it shares with Total, the new NPR-A acreage in just picked up on the eastern edge of the northwest NPR-A planning area, or elsewhere, Mann said he didn’t know.
“Obviously we already have seismic on the Total acreage where Total is the operator,” he said, and no seismic has been shot in recent years on Talisman’s new NPR-A acreage.
“And obviously we have our own views on geology and prospectivity,” he said in regard to the 9,362 foot, Caribou 26-11 No. 1 well Total drilled on their joint acreage this past winter. (See July 4 article in Petroleum News.)
Mann said Talisman “is in the middle of the budgeting and planning process right now,” and is looking at all its “high impact, albeit higher risk prospects,” including the NPR-A. “Typically we finalize our budget in September or October. We think there is a lot of prospectivity in Alaska,” he said, noting that the company was also looking at its portfolio of “higher impact, higher risk prospects, in Trinidad, Columbia and Qatar.
“We typically spend 5 to 10 to 15 percent of our capital budget on some of the larger, higher potential prospects. … For an oil and gas company, a successful exploration program is the best way to add shareholder value,” Mann said. Talisman’s capex budget is expected to be $2.5 billion next year.
When asked if the company is looking at other investment opportunities in Alaska, he said, “It’s a relatively new area for Fortuna, and indirectly for Talisman. We … drilled the first well and are starting to get a feel for the play fairway in that part of Alaska. If there are attractive deals to be done, we’d be happy to do them.’
John ’Thart, Talisman’s executive vice president of international exploration, is in charge of the company’s Alaska exploration program, Mann said.
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