Pacific Energy Takes 10% Stake in Beta Field Offshore California
Pacific Energy Resources has signed a definitive Purchase and Sale Agreement with SWEPI LP regarding the sale of its 12% interest in the Beta Oil Field Unit, offshore California. Before the acquisition is completed, the Corporation is required to satisfy a number of financial and regulatory requirements.
The Beta Oil Field is located in San Pedro Area, in Federal waters nine miles offshore Long Beach, California. The leases in question are POCS 300, 301 and 306. A complex of two production platforms (Eureka and Ellen) and a facilities Platform (Elly) handle production from these leases. Platform Edith, also in the Beta Oil Field in lease POCS 296 is not part of this transaction.
The Beta Field was discovered in 1976 by Shell Oil Company. Production started in 1981 from Platform Ellen. Production began on Platform Eureka in 1985. Peak production from the Beta Field was 20,800 barrels of oil per day in 1986. Cumulative production through 2004 for Platforms Ellen and Eureka is estimated at 76,000,000. Eureka accounted for nearly 38,000,000 barrels of oil from 1985 until the production was idled in 1999, at which time it was averaging over 4,400 barrels of oil per day. Currently, production from Ellen, is about 2100 BOE/day.
Netherland Sewell & Associates (NSA) estimated Proved Reserves of 19.78 Million barrels of 14-degreeAPI oil and 3.23 Bcf of gas as of May 1, 2006 for the Unit. It also estimated 11.61 Million barrels of Probable oil reserves, 1.93 Bcf of Probable gas reserves, 31.26 Million barrels of Possible oil reserves and 4.84 Bcf of Possible gas reserves.
As part of the acquisition process, the Corporation is required to submit to certain federal, state, and local regulatory governmental agencies executed transfer documents and other regulatory
compliance forms sufficient to allow the Corporation to own and operate those certain federal oil and gas leases, platforms, facilities, equipment, pipelines, rights-of-way, permits, and licenses which are part of the Beta Oil Field. The Minerals Management Service, Pacific OCS Regional Office located in Camarillo, California, is the primary federal regulatory agency responsible for the management of federal lands, subsoil and seabeds located on the Outer Continental Shelf off of the California coast. In connection with the filing of the requisite transfer documents and compliance forms, the Corporation will submit lease development bonds, a right-of-way bond, supplemental abandonment bonds and other securities acceptable to the MMS in an amount in excess of $90 Million along with Certificates of Financial Responsibility evidencing insurance coverage of $35 Million. The Corporation will also submit additional bonds and certificates of insurance to the applicable state and local agencies having regulatory authority over state lands offshore of the California coast and other state and public lands onshore located in the Long Beach, California area.