Mustang developed by small independent

First Alaska North Slope oil field to be taken from discovery to production by a small independent, Brooks Range Petroleum Corp.

Kay Cashman

Petroleum News

A story on page 1 of this issue covers the progress being made by new owner Finnex to get the North Slope Mustang field re-started later this year.

The history of the field is in its own right just as noteworthy as that effort.

Mustang was the first oil field on Alaska's North Slope to have been taken from discovery to production by a small independent -- Brooks Range Petroleum Corp., or BPRC.

BRPC was formed in 2004 as the operating arm of the Kansas-based Alaska Venture Capital Group, or AVCG, to pursue large or mid-sized oil fields passed over during the first decades of North Slope development. The lead individual was Bart Armfield.

The small independent spent 8 years looking for the right North Slope play before drilling the North Tarn No. 1A discovery well in 2012. The resulting Mustang field was estimated to hold some 21.2 million proven barrels of oil in place.

BRPC then spent the next several years responding to a series of technical, economic, political and logistical challenges at the Mustang field. While some of those complications were inherent to the field and to the company, others were external, such as the crash in oil prices in 2014, as well as the 2017 veto by then-Gov. Bill Walker of previously approved oil and gas tax credits designed to offset exploration expenses for companies such as BRPC.

Despite these challenges, BRPC succeeded in putting Mustang online in early November 2019. Per the Alaska Oil and Gas Conservation Commission the field produced 10,999 barrels of oil that month, averaging 478 barrels a day for the 23 days it was in production.

BRPC conducted an extended production test from the North Tarn No. 1A well using its temporary processing facilities and exported oil to the Alpine Pipeline System. By the time a flaring permit for the unit expired on Nov. 27, 2019, the company had produced 11,944 barrels of oil, according to its estimates.

Although Mustang production was small by North Slope standards, it was a sign that the basin was at least theoretically accessible to players beyond multinational majors and even beyond large and mighty independents with strong balance sheets.

But the challenges that had plagued earlier years continued apace.

As the production test was proceeding, a private sector backer failed to meet its financial obligations on the project. BRPC and working interest owners began refinancing a major loan with the Alaska Industrial Development and Export Authority, their main financial backer.

According to BRPC, AIDEA issued a notice of default on that debt in early October, and then, in early November exercised its rights to accelerate debt repayments.

BRPC suspended operations.

The story continues from there, but BRPC was not able to re-start the field without AIDEA's backing.