You are here

Armstrong, Repsol redo Alaska agreement

Armstrong and Repsol restructure Alaska project.
Armstrong, Repsol redo Alaska agreement

Repsol and privately held Armstrong (70 & 148, 75% and GMT Exploration Company 25%) have reached an agreement to strategically re-align their interests in their Alaska North Slope exploration and development venture. The confidential agreement includes a combination of cash, operational control, drilling commitments and contractual adjustments for monetary considerations in excess of US$800 million.

Per the restructured agreement, Armstrong has acquired a 15% working interest (to add to its 30%) in the initial development area near the Colville River Delta where the majority of exploratory and appraisal drilling activities have been carried out. In addition, Armstrong has the option of acquiring an additional 6% and assuming operatorship in the development area. Armstrong also acquired a 45% working interest (to add to its 30%) and operatorship in the jointly-owned exploratory lands (750,000+ acres). It is anticipated that Armstrong, after exercising its 6% option, will own 51% and Repsol 49% in the development area, and Armstrong 75% and Repsol 25% in the exploration area. As part of this agreement, the previously planned 2015-16 winter appraisal drilling campaign has been deferred.

Over the last four years, the venture has drilled 16 wildcat and appraisal wells on the North Slope resulting in a 100% track record of finding oil with most wells having oil pay in multiple zones. Third-party engineering firm DeGolyer and MacNaughton reports C1 reserves of 497 MMbbl, C2 reserves of 1438 MMbbl and C3 reserves of 3758 MMbbl.

Armstrong and Repsol are in the early stages of developing their new discoveries in the Colville River Delta area located between the 3.5 billion bbl Kuparuk River Field and the 700 MMbbl plus Alpine Field. Permitting work is ongoing for a three-pad development. Field production rates are estimated to be on the order of 120,000 b/d.

Image from Repsol.

Latest profiles