Phillips announces Alaska alliance; completes ARCO acquisition

Phillips Petroleum Co., Bartlesville, Okla., raised its stake in Alaska's North Slope this week with the formation of a two-part exploration alliance to explore and develop the area with Alberta Energy Co., Calgary, and Chevron USA Inc., a unit of Chevron Corp. Phillips unveiled plans for the alliance Thursday. On Tuesday, the company completed its $965 million acquisition of ARCO's businesses in Alaska.


Phillips Petroleum Co., Bartlesville, Okla., raised its stake in Alaska's North Slope this week with the formation of a two-part exploration alliance to explore and develop Alaska's North Slope with Alberta Energy Co., Calgary, and Chevron USA Inc., a unit of Chevron Corp. Phillips unveiled plans for the alliance Thursday. On Tuesday, the company completed its $965 million acquisition of ARCO's businesses in Alaska.

The alliance with AEC and Chevron includes nearly 150,000 acres on Alaska's North Slope and in the Beaufort Sea, and also provides for proportional ownership of seven leases containing 28,504 acres off Prudhoe Bay in the proposed McCovey Unit.

Under the agreement, AEC Oil & Gas will earn a 33.3% interest in the area leases through a farm-out agreement in the initial well. Phillips's exploration and development operator, Phillips Alaska Inc., and Chevron each will hold a 33.3% interest in the proposed unit. The companies plan to file permits to drill the exploration prospect from an ice island this winter.

The second part of the alignment agreement covers 114,262 acres in the Grizzly Gomo prospect area, located south of the Kuparuk River oil field. AEC Oil & Gas will earn a 20% interest in the area, while Phillips Alaska and Chevron each will hold a 40% interest in the Grizzly Gomo area. Prospective exploration drilling could occur in this area in the 2001-02 winter season.

This is Phillips's second closing in its two-part ARCO acquisition, covering certain pipeline interests and marine assets. The first closing, which took place Apr. 26, included ARCO's exploration and production assets in Alaska.

At the time of the first closing, it was announced that the Prudhoe Bay Unit (PBU) equity interests of Phillips, BP, and ExxonMobil Corp. would be realigned, and a single operatorship would be established (OGJ, Apr. 24, 2000, p. 26). Phillips holds a 36% interest. BP is operator of the Prudhoe Bay Unit, while Phillips operates the Kuparuk River and Alpine units, the other major fields on the North Slope.

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