Explorationists can never say never, says Harry Wilson, chairman of Kirkland Resources AS.
He was explaining why his exploration company is based in Harpenden, U,K., but register in Oslo and how it acquired unique assets.
In 1987 Wilson set up Kirkland Resources Holdings plc to build a portfolio of prospective acreage in the Far East. By 1989 it needed market listing to fund further growth. But Wilson balked at paying 500,000 ($800,000)/year to run a U.K. listing. He looked elsewhere.
In Norway, Wilson found Norsk Polar Navigasjon AS, a company ripe for takeover. He also thought Oslo's market would be easy to work with. In April 1990, Wilson engineered a reverse takeover in which Norsk Polar became the, parent company. He then changed its name to Kirkland Resources AS.
STAGING POST
Norsk Polar was set up in the early days of aviation to build an airport in Svalbard, the group of islands north of Norway in the Barents Sea. The airport was to act as a refueling point for flights between the U.S. and Europe. But aviation technology developed faster than the airport. The company held onto its land for mineral rights and began other projects.
Since then, geologists have surveyed Svalbard and a well was drilled near Norsk Polar acreage in 1988. Gas resources of 5 bcf to 5 tcf have been claimed, but Wilson is not excited. Kirkland is keeping up with its license obligations, though, just in case.
Even more beguiling are agreements Norsk Polar made with Petrofina SA in 1970. Petrofina invited Norsk Polar to represent its interests in the Barents Sea. In return, Norsk Polar can take a 1% carried interest in Fina's Barents Sea acreage and increase its interest to 10% in Fina acreage, once a discovery is made, upon payment of back costs and a penalty.
Petrofina's 5% interest in Block 7121/5, which includes part of the 3.2 tcf Snohvit discovery, and Block 7120/5, into which the 1.5 tcf Albatross gas reservoir extends, could become a valuable asset for Kirkland if the fields are declared commercial in the next decade.
FAR EAST DRILLING
Meanwhile, Kirkland is putting its efforts into two main areas: Far East exploration and developments involving specialist technical knowledge.
The company plans a 10 well drilling program in Philippines, Korea, and Thailand during 1993 94. Total reserves potential is gauged at 1.9 6.8 billion bbl of oil equivalent.
In the U.K., Kirkland holds coalbed methane exploration licenses EXL 200 and 257, the first of which covers "most of South Wales." Wilson said there could be more than 10 tcf of recoverable gas under EXL 200 acreage. He hopes to begin drilling late in 1993 and is talking to majors with a view to a farmout.
With such prospects in hand it is no wonder Kirkland keeps Svalbard on hold. But long term? Never say never.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
