PERTH (miningweekly.com) – Oil and gas major Santos has announced plans to farm down half of its working interest in 148 exploration leases, covering more than 270 000 acres of land, on the Alaska North Slope in an agreement with APA Alaska LLC1 and Lagniappe Alaska LLC2.

The company told shareholders on Wednesday that the farm-down agreements were consistent with its Alaska strategy to focus efforts on the development of the Pikka project.

The exploration leases are located on the eastern North Slope with multiple prospects in the late Cretaceous Brookian and Schrader Bluff formations. Under the terms of the farm-down agreement, initial activities during the exploration phase will be undertaken without cost to Santos.

Santos acquired the acreage as part of its merger with Oil Search in 2021. The farm-down is subject to customary government approvals.

Santos MD and CEO Kevin Gallagher said he was delighted that Santos has been able to optimise its working interest in its Alaskan acreage in line with the strategy to focus on development of the Pikka project.

“I am pleased we’ve reached this agreement to farm down our exploration assets in Alaska. This transaction demonstrates the continued level of interest in exploration and development projects in the region, a tier-one jurisdiction with supportive stakeholders and prospective undeveloped acreage,” Gallagher said.

“We look forward to working with our partners on the North Slope and continuing to build strong relationships together as we continue to develop and optimise our Alaskan business.”

Following execution of the farm-down agreement, Santos will retain a 25% working interest in the leases.

Santos last year announced a positive final investment decision on the $2.6-billion Pikka Phase 1 project, which will produce 80 000 bbl/d of oil gross, and first oil is targeted for 2026.