The Finnex LLC deal to purchase the assets of the Mustang oil field between the Kuparuk River and Colville River units on the North Slope appears to have fallen through and the Southern Miluveach unit is in the hands of AIDEA-owned Mustang Holding LLC, per a Dec. 4 decision posted this morning by Alaska's Division of Oil and Gas.
The main financial backer of the Mustang oil field has been the Alaska Industrial Development and Export Authority, or AIDEA. Anchorage-based Finnex was formed on June 23, per a filing with the Alaska Division of Corporations, Business and Professional Licensing. According to the filing, Thyssen Petroleum Alaska LLC holds 85% of the company and Galactico LLC holds the remaining 15%. An affiliate of Thyssen, TP North Slope Development LLC, was part of the joint venture the original operator of the SMU put together - Brooks Range Petroleum Corp, or BRPC.
"In late October2020, Mustang Holding informed the Division that it had not reached an agreement to transfer the working interest or operatorship to Finnex and that Mustang Holding, through experienced oilfield services companies, would be maintaining the SMU in a cold shutdown mode while AIDEA continued to pursue an operator for the SMU and related assets," Division Director Tom Stokes wrote in his decision to Geoffrey A. Johns of Mustang Holding.
Mustang Holding, per Stokes, "submitted documents to the Division for recognition of the transfer of working interest to its name and a request that it be named the operator of the SMU," which the agency approved on Dec. 3 and 4, respectively.
On Oct. 1, then-operator BRPC and Finnex filed the eighth annual plan of development for the Southern Miluveach unit on behalf of the working interest owners with the division, promising sustained oil production from the unit's Mustang field by third quarter 2021.
In the decision dated Dec. 4, the division said it now considers the eighth plan of development, or POD, "as if it were initially submitted by Mustang Holding and considers the stated intentions and capabilities of Mustang Holding in its finding and decision," which was to disapprove the POD with modifications.
"Mustang Holding does not possess the technical capabilities or capacity to carry out the work commitments found in the 8th POD, but does possess, through competent contractors, the ability to maintain the SMU in cold shutdown," Stokes wrote. "By maintaining the SMU in cold shutdown status, Mustang Holding will be preserving the SMU Infrastructure and other SMU components in a manner to allow for their marketing and an expedient acquisition by an operator who can return the SMU to production," thus also protecting the interests of the state of Alaska, the SMU landowner.
- KAY CASHMAN
See full story in Dec. 13 issue of Petroleum News, available online Friday, Dec. 11, at www.petroleumnews.com.
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