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Lagniappe, Santos, APA Apache deal on E North Slope acreage finalized
Kay Cashman Petroleum News
A spokesperson for APA Corp., holding company for Apache Corp., told Petroleum News in mid-November that the "farm in agreement" between APA, Armstrong Oil & Gas's Lagniappe Alaska, and Santos on a 148 lease block on Alaska's eastern North Slope had been "executed and we are proceeding in accordance with it."
The lease block encompasses 270,000 acres south of the Badami unit.
The agreement between the three companies is in line with Santos'Alaska strategy to focus on its big Pikka development west of the central North Slope. Santos said Sept. 19 that it was "farming down" half of its working interest in the lease block it shared approximately 50-50 with Lagniappe.
Once the agreement was executed Santos said its working interest would be 25%.
Under the terms of the deal, initial activities during the exploration phase would be undertaken without cost to Santos.
On Sept. 20, APA Corp. told Petroleum News that Bill Armstrong's Lagniappe Alaska would be the operator of the acreage.
The lease block, Santos said, contains "multiple prospects in the late Cretaceous Brookian and Schrader Bluff formations."
Although Bill Armstrong has not commented on the agreement, on March 30, after Lagniappe had begun permitting for the area, he told Petroleum News in a text that the exploration wells will target Brookian objectives -- "Pikka look-a-likes that are defined off of high effort, reprocessed modern 3D. Really exciting stuff. Big targets."
There has been "virtually no prior drilling in the area. The wells that have been drilled have great shows and some have bypassed pay on old logs," Armstrong added.
Six wells, two years On Nov. 10, the Alaska Department of Natural Resources'Division of Oil and Gas approved Lagniappe's land use permit for off-road travel and ice construction, which the company had applied for on Oct. 4 for the "Lagniappe Exploration Program" on the eastern North Slope.
The general use permit authorizes Lagniappe to conduct the activities on state of Alaska land and waters between the Colville and Canning Rivers, subject to the conditions of the permit, effective Nov. 10 through Nov. 10, 2028. Specific projects will be reviewed and approved on a case-by-case basis, the approval said.
Exploration activity for the five-year permit is expected to begin sometime in November, depending on when tundra activity is approved in the area.
Lagniappe will drill six wells with a maximum of three wells per year. The company hopes the exploration program will take no more than two consecutive years.
The first winter mobilization, expected to be this winter, will transport and deliver the Doyon 141 drilling rig to the King Street-1 well, the Nabors 105 drilling rig to the Voodoo-1 well and Sockeye-1 well.
Winter mobilization will be conducted via an overland ice road route originating from the existing gravel Endicott Road. A 500-foot by 785-foot temporary staging and off-road pad, constructed of ice, will be built near the origin of the project ice road to support mobilization efforts. A semicircular ice road turnout, approximately 200 feet long by 20 feet wide, will be constructed on the north side of Endicott Road (at the Lagniappe ice road origin) to support wide vehicle turn access.
--KAY CASHMAN
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