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Trading Bay continues to promote prospects Paul Craig’s company holds leases in the Cook Inlet basin and an interest in the northern half of the Umiat field in NPR-A Alan Bailey Petroleum News Staff Writer
Paul Craig, owner of Trading Bay Oil and Gas LLC, told Petroleum News in July that his company is holding discussions with parties interested in his Hanna prospect. However, there are no existing commitments regarding the prospect, he said.
The Hanna prospect lies under five Trading Bay Oil and Gas leases between Pretty Creek and Lewis River on the west side of the Cook Inlet.
“It’s right over the infrastructure and it’s right on structure right between up dip gas at Lewis River and down dip gas at Pretty Creek,” Craig said. “So it would seem to be an attractive prospect from all perspectives.” Acquired in 2002 Trading Bay Oil and Gas acquired the leases in 2002, along with a lease at the northwest corner of the Beluga gas field. The company hoped to see drilling in the leases and has sought drilling capital, farmouts or purchasers.
Under a farmout agreement, Pelican Hill Oil and Gas drilled Trading Bay Oil and Gas’s Beluga prospect in 2004. However, that well proved dry and, discouraged by this and an earlier dry well near Trading Bay, Pelican Hill pulled out of Alaska in March 2005.
They left the state before drilling the Hanna prospect, Craig said. “(I) continue to own the Pelican Hill dry hole (lease) and there may be a deep oil prospect (there) but I’ve yet to decide what I’m going to do with that lease.” Trading Bay Energy Craig’s original company, Trading Bay Energy Corp., bought several oil and gas leases back in the 1990s. Trading Bay Energy sold all of these leases to Forcenergy Inc. in 1997 but retained some working interest and royalty interest, Craig said. All of the leases have subsequently expired, except for one lease that became integrated into the Ninilchik unit on the Kenai Peninsula, he said. This lease has become the subject of a legal dispute with Unocal and Marathon.
“There was a case in federal district court where I attempted to have contractual rights to participate honored by Unocal and Marathon,” Craig said. Unocal and Marathon interpret the contract differently than Craig does, he said.
Craig said that the federal court agreed with Unocal and Marathon and that the case has now gone to the appellate court. NPR-A lease As an individual, Craig owns a 50 percent interest in a lease that covers the northern half of the Umiat oil field in the National Petroleum Reserve-Alaska.
“I acquired that in 2003 with the notion that it’s a 10-year lease and oil prices look likely to increase and infrastructure move closer,” Craig said.
But Craig holds no illusions about the challenges associated with oil and gas exploration.
“From the school of hard knocks I learned how challenging it is to raise capital for drilling,” he said.
However, with increasing oil and gas prices, Craig feels optimistic.
“It’s still a matter of getting a rig over and putting a hole in the ground,” he said of his Hanna prospect.
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