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Vol. 25, No.08 Week of February 23, 2020
Providing coverage of Alaska and northern Canada's oil and gas industry

Alaska lease transfers, terminations

Repsol transfers majority interest in 12 tracts to Oil Search; Beechey Point tract and North Nenana exploration license terminated

Kay Cashman

Petroleum News

Alaska Department of Natural Resources’ Division of Oil and Gas records show that in January Repsol E&P USA’s assignment of majority interest in 12 leases to Oil Search was approved, a Beechey Point lease held by Brooks Range Petroleum Corp. was terminated and the North Nenana exploration license was terminated.

The assignments from Repsol to Oil Search, its partner in and operator of the Pikka unit, involved transferring a 51% working interest and a 42.5% royalty interest in all 12 leases.

The tracts were won by Repsol in the 2018 North Slope areawide oil and gas lease sale held by DNR. Bids were opened in Anchorage Nov. 15, 2018.

Two of them were the only unleased tracts between Repsol and Oil Search acreage some distance south of Pikka.

One of the leases is at the southern tip of the Pikka unit.

The remaining nine tracts are generally between BRPC acreage and that company’s Southern Miluveach unit south of Kuparuk in an area east of Pikka. On four of those tracts Repsol placed the highest bid per acre in the sale, $586. The totals bid for those four tracts, more than $1.5 million each, were also the highest bonus bids on sale tracts.

The 12 lease numbers and their approximate acreage are as follows:

* ADL 393782 (1,440 acres)

* ADL 393783 (1,440 acres)

* ADL 393873 (2,501 acres)

* ADL 393874 (1,232 acres)

* ADL 393875 (2,560 acres)

*ADL 393876 (1,280 acres)

* ADL 393877 (1,920 acres)

* ADL 393878 (1,920 acres)

* ADL 393879 (1,241 acres)

* ADL 393880 (1,920 acres)

* ADL 393881 (2,491 acres)

* ADL 393882 (640 acres)

Beechey Point lease terminated

The Brooks Range Beechey Point lease ADL 39214 was terminated for failure to pay rent.

The 1,319-acre tract is offshore adjacent to the company’s former Beechey Point unit in the Gwydyr Bay region north of Prudhoe Bay, between the Milne Point and Northstar units. It was won by Kansas-based Alaska Venture Capital Group, or AVCG, in the December 2011 State of Alaska Beaufort Sea lease sale.

Brooks Range was formed in 2004 as the operator arm of AVCG, which was created explicitly to target oil reservoirs passed over during the first decades of North Slope development.

Working on behalf of varying joint ventures, Brooks Range pursued exploration opportunities across the North Slope, including the Beechey Point unit, Tofkat unit, Putu unit, Kachemach unit and a related cluster of prospects nestled between the Badami and Point Thomson units known under various names over the years.

Ultimately, Brooks Range made a significant discovery southwest of the Kuparuk River unit. The prospect was initially called North Tarn and later became known as Mustang. It was eventually incorporated into the Southern Miluveach unit, today still operated by Brooks Range, which brought the field online in November.

Exploration license terminated

The North Nenana exploration license, terminated for failure to comply with work commitment requirements, was originally issued to Rocky Riley and later assigned by him to Tolovana Energy at his Fairbanks address.

In Alaska’s Eastern Interior, the 5-year license under ADL file 392535 carried a $500,000 work commitment.

The license covered 25,294 acres in the Minto Flats State Game Refuge and was some 35 miles south and west of Fairbanks close to the Parks Highway and on the northern margin of the Nenana basin.

Administered by the division, the exploration licensing program’s objective is to encourage oil and gas exploration in areas far from existing infrastructure, areas with unknown hydrocarbon potential and where there is a higher investment risk to the operator.

The licensee has the exclusive right to explore for oil and/or gas in the license area, requiring a one-time $1 per acre fee and a specified minimum to be spent, a work commitment, on exploration. An annual report is due on the license showing direct expenditures.

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