Royale, Eyeing Alaska For Unconventional, Adds To Its Holdings

Purchased 5,083 acres on the North Slope in AL.

Royale Energy Inc. (Nasdaq: ROYL) acquired 5,083 more acres on Alaska’s North Slope that are adjacent to its already considerable holdings, the company announced Aug. 1.

The land holdings are being eyed for shale development.

Royale reached an agreement with Rampart Energy Ltd., an Australian company. Rampart said the North Slope ranks near the top of U.S. shale plays based on technically recoverable oil. In a May presentation, Rampart said the shale’s thickness, favorable comparisons with lower 48 equivalents and estimates of 2 billion barrels of recoverable oil made the unconventional play attractive.

Royale has held up to 100,000 acres in the North Slope with the intention of pursuing a shale oil play in an area known predominantly for conventional oil drilling. Royale, based in San Diego, was awarded acreage pursuant to a 2011 North Slope area wide lease sale, which the state had not previously been able to deliver until last month.

In a December 2011 lease sale, Royale bid $3.67 million on 87 tracts. It ultimately won 56 tracts, or 91,039 acres, for $2.48 million, according to the Alaska Department of Natural Resources.

Royale agreed to add the additional acreage to an existing agreement upon receipt of a cash payment.

Rampart also engaged Netherland, Sewell & Associates Inc. Worldwide Petroleum Consultants, www.netherlandsewell.com, to perform a Resource Evaluation of the acreage. Results of the report are expected to be made public in August.

Royale Energy owns wells and leases in California’s Sacramento and San Joaquin basins, Utah and in the Gulf Coast basins of Texas and Louisiana.