After a reshuffling, Armstrong Oil & Gas Inc. is gaining ownership in its joint venture with Repsol SA in Alaska's North Slope.
Armstrong said Oct. 13 it has reached an agreement with Spain's Repsol to strategically re-align their interests in the project. The confidential agreement includes a combination of cash, operational control, drilling commitments and contractual adjustments for monetary considerations in excess of $800 million, the release said.
"Armstrong and Repsol's North Slope project is representative of the new movement in Alaska where smaller independents work and operate in areas previously dominated by major oil companies," said Bill Armstrong, president of Armstrong Oil & Gas, in a statement.
As part of the deal, Denver-based Armstrong acquired a 15% working interest in the initial development area near the Colville River Delta, bringing its total to 45%. The area is where the majority of exploratory and appraisal drilling activities have been carried out.
In addition, Armstrong has the option of acquiring an additional 6% and assuming operatorship in the development area. After exercising its option, the company will own 51% and Repsol 49%.
Additionally, Armstrong also acquired a 45% working interest and operatorship in the jointly-owned exploratory lands. This brings the company's total interest to 75% in more than 750,000 acres. Repsol owns the remaining 25% interest in the exploration area.
As part of the agreement, the previously planned 2015-16 winter appraisal drilling campaign has been deferred.
Armstrong and Repsol are in the early stages of developing new discoveries in the Colville River Delta area. Permitting work is ongoing for a three-pad development. Field production rates are estimated to be on the order of 120,000 barrels per day of oil.