Portfolio Stock / EnCana Corp.
Oil driller plugs much-touted Alaska prospect
Tuesday February 18, 8:43 pm ET
By Yereth Rosen
Reuters
ANCHORAGE, Alaska, Feb 18 - An offshore oil prospect that Gov. Frank Murkowski predicted would lift Alaska out of its fiscal doldrums has been shut down by its operator, a government spokeswoman said on Tuesday.
Calgary-based EnCana Corp. (Toronto:ECA.TO - News) sent notice that it had plugged and abandoned its exploratory well at the McCovey prospect in the Beaufort Sea on Feb. 9, said Robin Cacy, a spokeswoman for the U.S. Minerals Management Service.
EnCana has 180 days to submit a plan for extending operations, Cacy said. If the company does not make such an application, the operations will cease and the leases may revert to the federal government, she said.
Alan Boras, a spokesman for EnCana, declined to disclose future plans for McCovey, where the company drilled its well this winter.
"It's plugged and abandoned, and the well is confidential," he said. "We're not talking about the results or what we are planning in the future."
In last fall's gubernatorial campaign, Murkowski, a U.S. senator at the time, argued that no new taxes were needed in Alaska because boosted oil revenue could be expected to bridge a fiscal gap expected to grow to $1 billion a year.
In autumn debates with his opponent, then-Lt. Gov. Fran Ulmer, he cited the McCovey prospect as the most promising new oil development on the horizon, with a potential of generating up to $400 million a year for the state. He predicted then that it could produce up to 300,000 barrels of oil a day -- half the current output at nearby Prudhoe Bay, North America's biggest oil field.
Murkowski spokesman John Manly said Tuesday that the Republican governor "remains hopeful" about McCovey, despite the apparent setback.
"Until we actually see them go out of business or something, we remain hopeful that they will keep working out there," he said. "How many wells were drilled at Prudhoe Bay before the discovery well was found?"
EnCana's partners at McCovey are ConocoPhillips (NYSE:COP - News) and ChevronTexaco (NYSE:CVX - News).
The McCovey prospect, 12 miles north of Prudhoe Bay in the Beaufort Sea, was the only Alaska oil prospect in the federally managed outercontinental shelf that was under active exploration.
The Minerals Management Service, a branch of the U.S. Interior Department, plans a series of additional Alaska outercontinental shelf lease sales, starting with a Beaufort Sea sale in September. |
