Lagniappe to explore

North Slope’s latest player has similarities and differences to Armstrong

Kay Cashman

Petroleum News

Taking a page from Bill Armstrong’s play book, Alaska’s newest North Slope player, Lagniappe, is committed to an aggressive exploration program in an area where previous drilling might have missed oil.

The only differences between the two companies are that Lafayette, Louisiana-based Lagniappe AK LLC, part of Lagniappe AK Holdings, bid much higher than Denver-based Armstrong Oil & Gas has ever bid in Alaska - and that very little previous drilling has occurred in the area in which Lagniappe chose acreage.

Lagniappe, formed in Alaska just prior to the Nov. 15 bid opening for the 2018 state areawide North Slope oil and gas sale, was the high bidder on 120 tracts (see page 1 story and map on page 11), bidding an average of more than $72 an acre for a total of $14.1 million. The 195,200-acre block is on the eastern North Slope, versus where Armstrong and its partners are developing their acreage west of the central Slope.

Lagniappe top exec speaks

Beyond that, PN was sworn to secrecy until the company is ready to say more.

As reported by a PN news bulletin on Nov. 15, titled “Lagniappe connected to Armstrong???” another similarity with Armstrong is that Lagniappe used a different company name and agent for a major lease sale transaction.

In Armstrong’s case it was 70 & 148 LLC, the latitude and longitude coordinates for Prudhoe Bay, then North America’s largest oil field, bidding about $6.9 million on 200,000 acres-plus in the October 2008 state North Slope and Beaufort Sea areawide lease sales and using Bill Armstrong’s assistant’s name and address as the agent. (Google maps showed her apartment was close to Armstrong’s Denver office.)

Armstrong and its partners could have as much oil at their Pikka and Horseshoe discoveries west of the central North Slope as that of Prudhoe Bay, says former Commissioner of Natural Resources Mark Myers, who has seen the well logs. The discoveries prompted a re-think of North Slope oil potential and new exploration and development, although it is still in its early stages.

Which company savvy enough to hide identity?

The individuals from the many national and international oil companies that gave Allen & Kirmse glowing recommendations, posted on the firm’s website, in everything from land services to brokering deals included Armstrong Vice President and minority owner Ed Kerr, who said their “technical expertise was the very best … while their diligence and timeliness allowed us to maintain a competitive edge on our competition. Over the past 32 years,” Kerr said he has worked with Allen & Kirmse “in 12 different states as well as the Beaufort Sea.”

When PN asked Bill Armstrong if he was behind the huge North Slope lease acquisition, he said “no comment.”

So, which company with deep enough pockets to gamble $14.1 million is savvy enough to use a fake name and an agent to hide behind?

Stay posted.

Armstrong on Dunleavy

“This is a great time to be in Alaska. Politically, maybe the best it has been in the 17 years I have working been in the state. Republicans control both houses and there is a pro-development governor,” he told Petroleum News Nov. 19.

“The new governor, Mike Dunleavy, is a really smart guy who appreciates the importance of proper resource (oil and gas) development. Gov. Dunleavy knows that Alaska, particularly the North Slope, still has a lot of remaining potential and realizes that the state can work together with the industry for smoother regulatory/permitting issues, access to infrastructure, buildout of roads and facilities, the importance of a fair, stable fiscal regime, etc.,” Armstrong said.

“The governor’s appointment of Sean Parnell as adviser on the AK LNG project is a good example of his practicality. Sean really understands the business. He has been in the oil business prior to public service and he knows the relationships between government and industry well. As governor, Sean put in place a fair, competitive tax law, SB 21, that replaced the disastrous ‘windfall profits’ tax (called ACES). Sean and the new governor know the importance of a gas pipeline and what it could do for the state,” he continued.

“Corri Feige is another good example of Dunleavy’s practicality. Corri was DNR Division of Oil and Gas director before. She knows the importance of working with big and small companies alike. She understands that the state can work hand in hand with the industry and everyone can win.”

—KAY CASHMAN