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AOGCC fines BRPC $6.34 million for 3 unplugged Beechey Pt wells
Kristen Nelson Petroleum News
The Alaska Oil and Gas Conservation Commission has fined Brooks Range Petroleum Corp. $6.34 million for three wells it drilled at the former Beechey Point unit which were never plugged and abandoned after they were drilled in 2007 and 2010.
North Shore 1 was spudded by BRPC in February 2007 and AOGCC approved a temporary shutdown of drilling and completion in April 2007, with operations resumed the following winter season. The well reached total depth and was completed as an oil well in early 2008, but the commission said activity on the well never resumed. The surface location is state oil and gas lease ADL 0390429. The commission said its regulations require that a well be plugged and abandoned if drilling or completion activities are not resumed within 12 months, putting the well in violation since May 2009.
Sak River 1A was spudded by BRPC in January 2010, reached total depth in February, was suspended in April 2010 and has remained in suspended status since then. The surface location is on ADL 0390429, part of the Beechey Point unit which was formed in August 2009. That lease, however, was contracted out of the unit in August 2012 and since it was no longer part of a unit the lease expired and BRPC lost rights to drill on that acreage.
North Shore 3 was spudded by BRPC in March 2010, reached total depth and was suspended in that same month and has been in suspended status since. The surface location is on ADL 0390429. The Alaska Department of Natural Resources notified BRPC in September 2014 that the Beechey Point unit automatically terminated in August 2014 as the conditions of the unit agreement were not met within 5 years of unit formation. The termination was appealed but was reaffirmed by the DNR commissioner in 2019 and ADL 0390429 expired in September 2019. The bottomhole location of North Shore 3, ADL 0047468, was extended by a certified well, but the well was later decertified and the lease expired in August 2019.
In its March 7 order, which informed the company that if it did not file a timely response the proposed action "would be deemed accepted by default," the commission said "BRPC was unresponsive" to the initial notice "and did not dispute the alleged violation."
"The AOGCC finds that due to BRPC's failure to P&A these wells, BRPC received a significant benefit by avoiding the burden and significant expense to properly P&A the wells and that the $6,340,000 civil penalty is appropriate under AS 31.05.150(g)."
If the order is not appealed, the fine must be paid within 30 days of the March 7 order.
Fine amount The commission told BRPC that if it properly plugged and abandoned the wells by June 30, 2025, and cleared the sites by Sept. 30, 2025, it would waive the daily penalties, which account for the vast majority of the fine, reducing the amount to $50,000 per initial violation for each well -- a total of $150,000.
The $6.34 million total is based on $500 per day for each day violations are uncorrected, which at the time the commission issued its notice of proposed enforcement action was 5,686 days for North Shore 1 -- where the violation began May 7, 2009 ($2,843,000 to the date of the letter on the proposed penalties, plus $48,500 for the 97 days from Dec. 12 to March 7, the date of the order); 4,477 days for Sak River 1 A ($2,238,500 plus $48,500 for the additional 97 days); and 1,926 days for North Shore 3 ($963,000 plus $48,500 for the additional 97 days).
Brooks Range Brooks Range, which owned and developed Mustang in the Southern Miluveach unit on the North Slope, was formerly headed by Bart Armfield, but 2020 paperwork posted by the Alaska Department of Commerce, Community and Economic Development's Division of Corporations, Business and Professional Licensing shows a change of registered agent from Armfield to Henricus Bockmeulen, and a change of address from 510 L Street in Anchorage of 301 Calista Court in Anchorage.
After BRPC defaulted on a loan from the Alaska Industrial Development and Export Authority, AIDEA took over Southern Miluveach and subsequently sold it to Finnex in 2023. Bockmeulen is shown on Division of Corporations filings as the registered agent for Finnex.
It was Bockmeulen who was addressed in AOGCC's Dec. 12 notice of proposed enforcement action on the failure to plug and abandon the three Beechey Point unit wells prior to losing rights to the properties.
--KRISTEN NELSON
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