Former Brooks Range executives seek second shot at Mustang

Some of the players in a failed North Slope oil project want to revive the state-backed field under a new name.

Alaska Division of Oil and Gas officials in mid-September approved the transfer of state leases from Brooks Range Petroleum Corp. to Finnex LLC, according to documents recently published on the division’s website.

Finnex is led by CEO Majid Jourabchi and Chief Operating Officer Harry Bockmeulen, who previously held the same positions at Brooks Range. Finnex was formed in June 2020 and is located in the same South Anchorage offices as Brooks Range, according to records filed with the state Division of Corporations, Business and Professional Licensing.

Brooks Range was the Anchorage-based oil junior that, under a prior management team, first attempted to produce oil from the small Mustang project with $70 million of help from the Alaska Industrial Development and Export Authority, the state-owned development bank.

AIDEA took control of the Mustang project in December 2020 following years of fits and starts by Brooks Range that ultimately led the authority to foreclose on the project assets in an attempt to recoup the $70 million authority officials invested in the Mustang development between 2012 and 2014.

Division of Oil and Gas officials also issued a notice to Brooks Range on Sept. 9 that they had terminated two of the company’s North Slope leases for failing to pay rent on the acreage that was due Sept. 1.

AIDEA officials have said they are working to eventually sell its share of Mustang assets. The authority has a 90 percent working interest ownership in the Southern Miluveach Unit that contains the oil prospect.

The tipping point was when Brooks Range’s majority owner, Singapore-based Alpha Energy Holdings, failed to make good on loan payments to AIDEA stemming from a prior refinancing of the investment firm’s obligations to the authority.

Jourabchi is also president of Houston-based Thyssen Petroleum, once a minority owner in Anchorage-based Brooks Range. Jourabchi told the Journal in May 2019 that he was part of a team of investors attempting to buy a majority stake in Mustang from Caracol Petroleum, a subsidiary of Alpha Energy.

The Mustang field is adjacent to the southern portion of ConocoPhillips’ large Kuparuk River field and also near the Pikka oil project being developed by Oil Search. The field is estimated to hold about 22 million barrels of oil and could peak at production rates of about 12,000 barrels per day when fully developed.

Brooks Range drilled test wells at Mustang in 2011 and 2012 that led AIDEA in December 2012 to take a stake in Mustang.

The state oil lease interests approved for transfer to Finnex by TP North Slope Development, Brooks Range and Caracol are outside of the Southern Miluveach Unit, which holds the Mustang facilities, but Jourabchi said in an Oct. 12 interview with the Journal that Thyssen Petroleum submitted a proposal to AIDEA to purchase the Mustang assets with the intent of producing from the field quickly. Thyssen owns 85 percent of Finnex.

“We feel it’s very credible,” Jourabchi said of the proposal.

He also said Finnex has secured $35 million in financing to restart development of Mustang.

“We feel we can get (Mustang) to production very quickly, but if it doesn’t happen, we have other ideas that clearly will take much longer,” Jourabchi said.

Brooks Range briefly produced oil from Mustang in 2019 but a lack of funding prevented sustained production operations.

A spokeswoman for AIDEA did not respond to questions about Mustang in time for this story.

Full development of the field was initially estimated to cost about $580 million and included drilling 11 production and 20 more gas and water injection wells, according to AIDEA’s project documents. Brooks Range later changed its plans to utilize smaller, modular production facilities to spur development.

Brooks Range leaders said when AIDEA made its first investment that they hoped to have Mustang in production by late 2014, and said when AIDEA made its second payment to the project oil would start flowing in late 2015.

Thyssen has producing assets in Louisiana.

Elwood Brehmer can be reached at [email protected].

Updated: 
10/12/2021 - 5:58pm