Polar Petroleum reported on May 31 that it has completed the acquisition of a 100 percent working interest (WI) in 12 offshore oil and gas leases comprising approximately 19,662 acres in Alaska's prolific North Slope region. The leases are collectively known as the North Point Thomson Project.
Polar Petroleum (AK) Corp., a wholly-owned subsidiary of Polar Petroleum Corp., signed the lease purchase agreement. The agreement reserved an overriding royalty of four percent for the sellers of the properties, and royalties for the state of Alaska of 12.5 percent for seven of the leases and 16.67 percent for five of the leases (Polar has an NRI of 83.5 percent in seven of the leases, and 79.33 percent in five of the leases).
Polar's newly acquired North Point Thomson Project properties are located in close proximity to significant oil and gas activities, both historic and ongoing, in Alaska's North Slope region:
According to Alaska's Department of Natural Resources, the main Thomson Sand Reservoir probably continues northwesterly beneath the southwestern portion of the North Point Thomson Project area. The report's conclusion was based upon the 64 feet of sand in the Challenge Island No. 1 well, the 6 feet of sand in the Alaska Island No. 1 well, and available seismic data. Additional targets for the North Point Thomson Project include the Pre-Mississippian of the 1990 ARCO Stinson oil discovery located just to the east. At the same time, most of the North Point Thomson Project area may have significant potential for oil production due to its position on the northern flank of a ridge-like structural feature. According to the US Geological Survey, this northern flank would have been oil-charged from the north as part of the Canning-Sagavanirktok Petroleum System, as were the Hammerhead (Sivulliq) and Kuvlum oil discoveries.
Bordering Polar's North Point Thomson Project to the south is ExxonMobil's Point Thomson Unit (PTU). The PTU represents an estimated 295 MMBo and 8 trillion cubic feet of natural gas (Tcf), which represents about 25 percent of the recoverable natural gas on Alaska's North Slope. Russia's Rosneft -- the world's largest publicly traded oil company -- entered an agreement in February 2013 with ExxonMobil, giving Rosneft the option to purchase a 25 percent interest in ExxonMobil's holdings in the Point Thomson field. From December 2012 to May 2013, ExxonMobil commenced construction of a 22-mile pipeline to transport liquid natural gas condensates westward from their PTU wells to the Badami Unit, where the liquid fuel will be diverted into the Trans-Alaska Pipeline System (TAPS).
Neighboring Polar's North Point Thomson Project 8 miles to the southwest is the producing Badami Unit. Badami has produced 5.9 MMBO and 30 billion cubic feet of gas (Bcf) to date, and as of May 2012 had production of 1,535 barrels of oil per day (bopd).
Two miles southwest of Polar's North Point Thomson Project is the location of the proposed Telemark Unit. The new Telemark Unit would lie between the Badami and Point Thomson units, and would develop the Tertiary "Flaxman Sands" encountered when Humble Oil (Exxon) drilled the onshore E. Mikkelsen Bay State No. 1 well in 1971. BP's Red Dog No. 1 Well, drilled in 1999, also lies within the proposed Telemark Unit area, and had 1,275 feet of oil and gas shows in Middle Brookian sands.
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