Pacific Energy Resources Ltd. has provided a general business update on several areas of strategic priority.
Onshore California Divestiture
The Company reaffirms that the sale of its second onshore California property (San Joaquin Basin assets) will close on or before July 31, 2008. The transaction is expected to bring in approximately $34 million which will be used for debt reduction, general working capital, and capital projects.
Platform Eureka Production
The Company is currently performing a rig upgrade on platform Eureka to bring additional wells back on line. The Company expects the additional wells to be online to meet its 2000 boe/d target from platform Eureka by the end of August. July 2008 month to date average gross production was approximately 8,450 barrels of oil equivalent ("boe/d") consisting of 4,596 boe/d from Alaska, 955 boe/d from onshore California (prior to the divestiture of the LA basin assets), and 2,896 boe/d from the Beta Field. Pacific Energy expects a total company gross production rate of between 11,000 - 12,000 boe/d by the end of December 2008, before the expected reduction of approximately 1,000 boe/d of production from the sale of its onshore California assets.
Cook Inlet - The Company has requested an extension of the July 31, 2008 deadline with the State of Alaska for establishing proof of contract for a heavy lift vessel to transport a jack up drilling rig to the Cook Inlet. The Company expects to begin drilling the Corsair prospect during the 2009 drilling season. The Corsair prospect may contain as much as 500 Bcf of gas and 100 million barrels of oil. Pacific Energy currently has 100% working interest in the prospect.
North Slope - Regarding the on-going litigation between ExxonMobil (the Point Thomson Unit Operator) and the State of Alaska, Department of Natural Resources ("DNR") regarding the DNR's decision earlier this year to terminate the Point Thomson Unit ("PTU") and all the leases that were included, the DNR rejected ExxonMobil's Plan of Development ("POD") submitted earlier this year, and terminated the PTU. ExxonMobil nonetheless plans to proceed, on the part of all 27 PTU working interest owners including Pacific Energy, with the multi-well drilling program at the Point Thomson field that was part of the rejected Plan of Development ("POD"). The Alaska State Division of Oil and gas estimates that Point Thomson holds in-place reserves of 490 million to 600 million barrels of natural gas liquids and 580 million to 950 million barrels of oil. Pacific Energy retains a less than 1% working interest in this development.
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