Santos to farm down Alaska North Slope asset interest

Sept. 20, 2023
Santos Ltd. will farm down half of its working interest in 148 exploration leases on the Alaska North Slope in an agreement with APA Alaska LLC, a subsidiary of APA Corp., and Lagniappe Alaska LLC, a subsidiary of Armstrong Oil & Gas.

Santos Ltd. will farm down half of its working interest in 148 exploration leases in the Lagniappe area of the Alaska North Slope in an agreement with APA Alaska LLC, a subsidiary of APA Corp., and Lagniappe Alaska LLC, a subsidiary of Armstrong Oil & Gas.

The leases cover more than 270,000 acres and are on the eastern North Slope with multiple prospects in the late Cretaceous Brookian and Schrader Bluff formations, Santos said in a release Sept. 20.

Farm-down of the acreage, which was acquired as part of its merger with Oil Search in 2021, is consistent with the operator’s Alaska strategy to focus on the Pikka conventional development (OGJ Online, Sept. 10, 2021). The company took final investment decision on Pikka Phase 1 oil development in 2022 and drilling began in June (OGJ Online, Aug. 17, 2022). The $2.6 billion project is expected to produce 80,000 b/d of oil when it comes on stream in 2026.

Following execution of the agreement, subject to customary government approvals, Santos’s working interest will be 25%.

Under the terms of the agreement, initial activities during the exploration phase will be undertaken without cost to Santos.