State extends Placer unit term

The state is extending the term of the Placer unit by two years.

In a Sept. 7 ruling, Department of Natural Resources Commission Andrew T. Mack gave operator ASRC Exploration LLC until Sept. 7, 2018, to continue work at the unit.

Without an extension, the North Slope unit would have expired in September 2016.

Earlier this summer, after completing its first exploration well as the unit, ASRC Exploration asked the state for a five-year extension to the unit terms and proposed a two-year plan to conduct preliminary work toward potentially developing the area.

The state felt that a five-year extension “would be contrary to the public’s interest in maximizing competition among parties and offering acreage for lease if resources are not diligently developed” and a shorter extension balanced the needs of the company and the public. Without an extension, the leases would become available to other operators.

A unit automatically expires five years after it become effective without an extension from the state. An exploration program is a common reason for providing an extension.

Earlier this year, ASRC Exploration completed the Placer No. 3 exploration well. The company has yet to release well results but suggested that the well expanded the known size of the Placer reservoir and appears to be capable of producing commercial volumes.

ASRC Exploration would spend the first year “determining reservoir extent and characteristics and defining infrastructure needs” and the second year “reservoir mapping and development well planning, performing engineering and cost studies for infrastructure locations, and proposing a participating area,” according to the ruling.

- ERIC LIDJI