Oil Search has a signed an agreement to acquire a slew of oil assets in the Alaska North Slope from privately-owned companies Armstrong Energy and GMT Exploration Company, according to reports in late October 2017. The deal, which is estimated to be worth ~US$ 400 million, includes Oil Search purchasing a 25.5% interest in the Pikka Unit and adjacent exploration acreage and a 37.5% interest in the Horseshoe block from Armstrong and GMT. These blocks are co-owned by Repsol. The Nanushuk play includes the Horseshoe block, which discovered oil in March 2017, in what Repsol called the biggest US onshore find in 30 years. It also confirmed that the Nanushuk Formation has one of the highest potentials of the prolific Alaska North Slope zone. Exploration wells Horseshoe-1 and Horseshoe-1A were drilled in North Slope lease ADL 392048 during the 2016-2017 winter drilling campaign and verified the Nanushuk as an important and emerging play. Horseshoe-1 was drilled to a TD of 1,828m (6,000 feet) and encountered over 45m (150 feet) of net oil pay in several reservoir zones in the Nanushuk section. Horseshoe-1A sidetrack was then kicked off and drilled to a total depth of 2,504m (8,215 feet), encountering more than 30m (100 feet) of net oil pay in the Nanushuk in the process. The contingent resources identified in Repsol and Armstrong Energy's blocks in the Nanushuk play in Alaska could amount to ~1.2 Bbls of recoverable light crude oil. Oil Search bought in assuming the field holds 500 MMbbls, expecting production to begin in 2023, with output to plateau at 80,000 to 120,000 bbls/d. In a statement, Oil Search Chief Executive Peter Botten said: "With the quality of the assets, the fact that they're tier 1, and the fact that we've gone in very conservatively against what Repsol are saying, I think we can demonstrate to the market that this will be a super deal for Oil Search in the medium term." Oil Search will assume operatorship on 1 June 2018, has the option of doubling its stake in the Alaskan assets for an additional US$ 450 million and plans to fund the deal from its cash reserves. Oil Search expects that the transaction will be completed by Q1 2018 at the latest.
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