Plans for Prudhoe Bay – Production or Litigation?

On June 30, 2016, the Department of Natural Resources (DNR) sent a letter to the Manager of Reservoir for the Prudhoe Bay Unit.

The purpose of the letter was to inform the operators of the unit that their Participating Area Plan of Development (POD) was not complete.

The department told the operator that a modified proposed POD was due by September 1, 2016. Specifically, DNR asked for detailed information about activities related to marketing the areas gas resource and moving towards Major Gas Sales (MGS).

On Tuesday, July 19th, Senator Giessel convened a joint House and Senate Resources hearing to discuss the actions taken by the State with regard to the POD.

In 2016. Mark Cothan, an attorney hired on contract in July of 2015, by the Department of Law, testified at the hearing.

In 2005. As the attorney for the Alaska Gasline Port Authority, Mr. Cothan testified before a Joint Budget and Audit Committee. The transcript of that hearing can be found here.

On page 48-49 you will find this statement: “The failure of the lessee- that would be the oil companies – to abide by all express and implied provisions of the lease is a default whenever the lessee fails to comply with any of the provisions of this lease and fails within 60 days after written notice of that default to begin and diligently prosecute operations to remedy that default, this lease may be terminated by an appropriate judicial proceeding….the Commissioner is given power without even going to a judicial proceeding to cancel the lease.”

60 days’ notice. June 30th letter. September 1st deadline.