NES Buys FairfieldNodal Cable-Free Systems for Apache's Cook Inlet Proj.

- NES Buys FairfieldNodal Cable-Free Systems for Apache's Cook Inlet Proj.

Friday, August 26, 2011
FairfieldNodal

FairfieldNodal recently completed a significant sale of its true cable-free nodal recording systems to NES, LLC, on behalf of Apache Corporation. The $30 million transaction, which includes ZLand and Z700 marine nodes, represents several industry firsts: the first use of Z700 marine nodes in the United States and the first major use of Z700 and ZLand together in a complementary operation.

NES will use these systems for Apache's extensive 3D land, marine and transition-zone seismic acquisition project in Cook Inlet, Alaska, where unpredictable ice and ground conditions as well as strict governmental requirements present some of the most difficult environmental challenges in North America. They expect the project to continue for up to three years.

"We're very excited about Apache's decision," said Gary Bartlett, FairfieldNodal's regional sales manager for North America. "We recently performed a rigorous 10-day test survey for them in the same area, using our ZLand and Z700 nodes in combination. To have Apache specify our nodes for such a difficult and important project shows how confident they are that our cable-free systems are up to the task."

Because all FairfieldNodal nodes are entirely self-contained, they are easier and faster to deploy and retrieve. In the Apache test survey, they performed flawlessly in the same onshore and shallow-water regions NES will tackle in their upcoming long-term project for Apache.

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NOAA Administrator Discusses Inlet O&G Industry, Belugas

- NOAA Administrator Discusses Inlet O&G Industry, Belugas

Wednesday, August 24, 2011
Knight Ridder/Tribune Business News
by Lisa Demer, Anchorage Daily News, Alaska

U.S. Sen. Mark Begich and a top Obama administration official sat down Tuesday with Cook Inlet gas and oil interests to discuss whether exploration and production could get a boost by streamlining requirements for protection of endangered Cook Inlet beluga whales.

Begich said he is trying to create an environment for increased natural gas production. He called natural gas critical to Southcentral Alaska's economic health. Utilities have said they expect a shortage by 2014.

Jane Lubchenco, administrator of the National Oceanic and Atmospheric Administration, told the group that NOAA knows it must work with industry.

"I think there is uniform agreement that we need to get our act together and be good partners with many different entities and certainly private sector looms large among those," she told the group.

She said NOAA is the federal government's steward of the oceans and stands as the lead science agency responding to oil spills at sea.

NOAA intends to use sound science in its decisions on resource development, Lubchenco said, a vision that developers applauded.

Before an oil or gas project in Cook Inlet can go forward, the federal agency overseeing its permits must consult with NOAA's National Marine Fisheries Service to assess any impact on belugas.

Projects may need to be modified, especially if they are in the more than 3,000 square miles of Cook Inlet designated as critical habitat for the whales.

Some developers are worried.

"The impacts on the industries are going to be profound, yet those industries did not lead to the decline," Jason Brune, formerly the executive director of the Resource Development Council and now with mining giant Anglo American, told Lubchenco. That's frustrating, he said.

The only known cause for the drop in the beluga population was overhunting in the 1990s by Alaska Natives, who sought the whales as a traditional, subsistence food, federal biologists have said.

One specific concern, Brune said later, centers on a prohibition against the discharge of fluids from the deep, specifically water separated from oil and treated, within or near critical habitat for belugas.

"The question comes up, how do we get that additional oil and gas exploration and development to happen?" Brune asked Lubchenco. "Let's face it, discharges do have to happen."

He said even if projects go forward, explorers and producers will be concerned about being hit by lawsuits.

Developers have spent $10 million in the last decade studying belugas and want to protect them, but also want to see their projects go through, he said.

When Escopeta Oil Co., a Houston-based independent, sought a permit to place its exploration jack-up rig in Cook Inlet, the project was analyzed for any impact to belugas, one official said after the meeting. The company was allowed to put it in place with no additional requirements, said Kaja Brix, Juneau-based assistant administrator over protected resources for the National Marine Fisheries Service.

Steve Sutherlin, strategic officer for Escopeta, told Lubchenco the company will monitor the belugas closely and provide to NOAA and its fisheries service detailed reports on any sightings, including what the belugas were doing, what direction they were headed in and how they reacted to the encounter with the company's boats or aircraft.

If whales get too close to the drilling area during the rig's operation, the crew must suspend drilling until the whales leave, federal officials said. Sutherlin said they may be able to slow their work, lowering the decibel level so that it doesn't harass belugas.

Also on Tuesday, representatives of Shell, Conoco Phillips and Statoil signed an agreement with NOAA to share scientific information from research in Arctic waters. Data on ocean currents, for instance, will be shared, Shell Alaska vice president Peter Slaiby said.

Copyright (c) 2011 Anchorage Daily News (Anchorage, Alaska)

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State: Additional Cook Inlet Investments Could Find New Gas

- State: Additional Cook Inlet Investments Could Find New Gas

Monday, August 15, 2011
Alaska Journal of Commerce
by Tim Bradner

An investment of $1 billion to $2 billion by natural gas producers in additional drilling in gas fields in Southcentral Alaska could meet projected gas supply shortages in the region until 2018 or 2020, possibly eliminating the need for local utilities to import liquefied natural gas.

A recent study by the state Division of Oil and Gas shows that if producers drill eight new production wells per year in the four largest gas fields in Cook Inlet Basin, the fields will produce sufficient new gas to meet the current 90 million cubic feet per day demand in the region at a cost of $10 million to $20 million per well with an additional $100 million investment in compression.

"This study considers what we think it will take, in terms of revenue, to get producers to produce additional gas we believe is in these fields, although we can't say the price that the field operators will feel is acceptable to make the investment," said Joe Balash, deputy commissioner in the state Department of Natural Resources, in the briefing.

ConocoPhillips, Marathon Oil Co. and Chevron Corp. are operators at the four fields included in the study.

The region's utilities, however, are skeptical that investments by producers will actually be made, and are proceeding with plans to have imported LNG available in Cook Inlet within three years.

"We can't take a chance. Our estimates show a supply gas in the region as early as 2014," said Jim Posey, general manager of Anchorage's city-owned Municipal Power & Light, one of several utilities in negotiations with potential LNG suppliers.

Despite what the state study said, Cook Inlet producers are actually drilling about half the new wells needed to sustain current production levels, Posey said. Four new development wells are planned for 2011.

The study by the Division of Oil and Gas examines gas reserves the state believes remain in the four largest gas fields, which include the Beluga, Ninilchik, North Cook Inlet and the McArthur River Grayling gas sands based on data that is public and some that is confidential, and relies on known costs for drilling and compression.

Balash said the state study included only the large producing fields and did not include new gas found though exploration, such as a recent 10 billion-cubic-foot gas discovery made by Buccaneer Energy LLC, an independent, on the Kenai Peninsula.

The study indicates that producers could earn a 20 percent internal rate of return in 2018 at a gas price below $6 per thousand cubic feet (mcf), a price that is about what producers are selling most gas produced in Cook Inlet, and a 15 percent rate of return on a gas price below $5 per mcf.

However, another assessment made in the study is that the net present value of many of the investments in wells will be modest, which could discourage some companies, particularly larger companies, from exploring, Balash said.

"It's quite possible that smaller projects could have quite good rates of return and yet have small net present values. This kind of investment might be very attractive for a small independent and less attractive for a larger company," said Jeff Dykstra, a commercial analyst in the state oil and gas division and one of the authors of the gas study.

Independent companies are in fact showing much more interest in Cook Inlet than are large companies such as the current producers.

"Most companies use several financial indicators in assessing possible investments including rate or return and net present value as well as their cash-flow needs," Bill Barron, director of the state oil and gas division, said in the briefing. Whether an investment will be made depends on a company's internal investment threshold, Barron said.

Information in the study will be used by state legislators next year as they consider additional funds needed for planning a possible $7.9 billion, 24-inch gas pipeline that could be built by the state from the North Slope. The 24-inch pipeline, which could bring gas from the slope to southern Alaska by 2019, is being considered as an alternative if a large 48-inch Alaska gas pipeline is seriously delayed.

Balash said the division will do a second increment to its Cook Inlet gas study taking into consideration a new estimate of technically-recoverable gas resources released by the U.S. Geological Survey. The USGS estimated that Cook Inlet could hold as much as 19 trillion cubic feet of conventional and unconventional gas resources, more than twice the amount of conventional gas discovered so far.

"We will try to determine a minimum economic field size that would allow some of these new resources to be developed," Balash said.

Copyright (c) 2011, Alaska Journal of Commerce, Anchorage

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Escopeta's Jackup Arrives in Cook Inlet, Set to Drill

- Escopeta's Jackup Arrives in Cook Inlet, Set to Drill

Monday, August 15, 2011
Alaska Journal of Commerce
by Tim Bradner

Spartan Drilling Co.'s Blake 151 jackup rig arrived Aug. 7 in Cook Inlet and cleared U.S. Customs before proceeding to an exploration location in upper Cook Inlet Aug. 10, a spokesman for Escopeta Oil and Gas Co. said.

The rig waited briefly in Kachemak Bay near Homer, Escopeta spokesman Steve Sutherland said in an interview.

"We [held] in Kachemak Bay until we clear customs and finalize some matters with the state Department of Natural Resources. We expect to be moving the rig to the drilling location in the Kitchen Light Unit," Sutherland said.

Escopeta has most of the permits it needs from the state. "Escopeta has an approved plan of operations from Department of Natural Resources," agency spokeswoman Elizebeth Bluemink said. "We plan an informal inspection after they arrive at the drill site but we don't have any pending DNR permits. What's still pending will come from other agencies, the AOGCC (Alaska Oil and Gas Conservation Commission) drilling permit, for example."

"We approved the plan of operations in July. The plan covers drilling related activities and not the transit period to get to the drill site," Bluemink said.

Escopeta is the main leaseholder in the Kitchen Lights Unit and will be operator of the exploration well.

If the rig moves to the location and successfully spuds the well it will qualify for a special state exploration incentive that will pay up to 100 percent of the first $25 million of costs of the first exploration well drilled with a jackup rig in Cook Inlet. Wells drilled by the same rig are eligible for follow-on incentives for the second and third exploration wells, of 90 percent of costs up to $22.5 million on the second well and 80 percent f the first $20 million for the third well.

However, the wells must be drilled for different companies.

The Blake 151 was towed from Vancouver, B.C. To Cook Inlet by three Foss Maritime Co. tugs. The rig was in Vancouver for several weeks undergoing modifications after being moved to the west Canadian city from the U.S. Gulf of Mexico by a Chinese heavy-left vessel.

The rig movement from the gulf was controversial because Escopeta's original plan was to move it directly to Cook Inlet after obtaining a waiver of the U.S. Jones Act from the Department of Homeland Security.

The rig was diverted to Canada after Homeland Security Secretary Janet Napolitano turned down the waiver request. U.S. Shipping interests who work to protect the Jones Act had urged Napolitano to turn down the waiver.

The Jones Act requires shipments of cargo between U.S. Ports to be made with American-built ships. Escoptea hired the Chinese heavy-lift ship because no U.S. Vessels were capable of moving the rig safely around the tip of South America, where there are rough seas, company president Danny Davis said earlier.

U.S. shipping groups are pushing for a penalty to be imposed on Escopta for a Jones Act violation.

"We expect the customs to issue a significant fine once the rig has completed its transit and positioned for duty in Cook Inlet," said Richard Berkowitz, Director of the Transportation Institute, a Seattle-based maritime industry association.

Even with the rig's voyage on a Chinese heavy-lift vessel terminated in Vancouver, B.C., a Jones Act violation has occurred, Berkowitz said.

Meanwhile, a second jackup rig may soon be headed to Cook Inlet. Buccaneer Energy, an Australian company, is purchasing a heavy jackup rig in Asia for drilling in Cook Inlet waters and elsewhere in coastal Alaska. That rig may be moved to Alaska this winter or by early spring.

Copyright (c) 2011, Alaska Journal of Commerce, Anchorage

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Chevron Sells Union Oil Cook Inlet Assets to Independent

- Chevron Sells Union Oil Cook Inlet Assets to Independent

Thursday, July 21, 2011
Knight Ridder/Tribune Business News
by Lisa Demer, Anchorage Daily News, Alaska

Chevron, the biggest oil and gas operator in Cook Inlet, is selling its assets there to an independent company, Hilcorp Alaska LLC.

Chevron and Hilcorp announced Tuesday that Chevron's subsidiary, Union Oil Co. of California, is selling contracts and interests in the Granite Point, Middle Ground Shoals, Trading Bay and MacArthur River fields.

The sale to Hilcorp also covers Chevron's interests in 10 offshore platforms, onshore gas fields, two gas storage facilities and two pipeline companies.

Terms were not disclosed. The companies said the deal should close by the end of the year, after it clears regulatory steps. Chevron plans to maintain its interests in Alaska's North Slope fields and the trans-Alaska oil pipeline.

The current net production for Chevron in Cook Inlet is 3,900 barrels of oil and 85 million cubic feet of natural gas per day, the company said.

A state senator from Kenai said the changeover should be good for Cook Inlet production. An environmentalist said he wanted to look into whether the new player has the will and the ability to invest in Cook Inlet's crumbling infrastructure.

Hilcorp is one of the biggest privately held oil and natural gas exploration and production companies in the United States, but it is dwarfed by big producers like Exxon Mobil, BP and Conoco Phillips.

"The standard pattern is the majors come in and pick the low-hanging fruit, and then the independents and juniors come in and mop up," said Bob Shavelson, executive director of the environmental advocacy group Cook Inletkeeper. "The biggest question is: Do they have the assets to deal with aging infrastructure in Cook Inlet?"

Some of the platforms date back to the post-statehood era of the late 1960s, and there are serious maintenance and corrosion issues, Shavelson said.

Sen. Tom Wagoner, R-Kenai, said he didn't think Hilcorp would be making the deal if it wasn't ready to invest.

"They have looked at the assets. They know what's here in Cook Inlet," said Wagoner, who got a call from Hilcorp about the sale Tuesday.

Hilcorp may be better situated for upgrading and expanding than Chevron, which has numerous projects around the world competing for its investment dollars, the senator said.

Hilcorp, headquartered in Houston, Texas, operates in nine areas including the Gulf Coast and the Rockies. It has more than 700 employees and is actively growing. It's been recognized for a progressive corporate culture. Last year, the Houston Chronicle ranked Hilcorp the No. 1 midsize workplace.

Wagoner said he hopes Cook Inlet workers hold onto their jobs.

"Those are the people I worry about," Wagoner said. "Those platforms -- those are a lot of jobs in Cook Inlet. Most of those people are my neighbors."

The Hilcorp acquisition comes after the federal government announced there's far more oil and natural gas in Cook Inlet than previously thought.

Copyright (c) 2011, Anchorage Daily News, Alaska

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Cook Inlet Drilling Still Lags Pace Needed to Sustain Gas Supply

Cook Inlet Drilling Still Lags Pace Needed to Sustain Gas Supply

Monday, May 09, 2011
Alaska Journal of Commerce
by Tim Bradner

More drilling is under way in Cook Inlet natural gas fields, but the pace is still short of the number estimated to needed to forestall shortages of gas in the region.

Still, there are glimmers of hope. Although the quantities are still small, new gas is coming into Enstar Natural Gas Co.'s pipeline system from a new producer, Armstrong Oil and Gas.

Also, explorers drilling for gas in Southcentral appear to be finding some, although it is too early to know whether the wells can be commercially produced.

The overall pace still falls short of what is needed.

Firms operating producing fields in Southcentral Alaska this year plan four new production wells. Independent companies also have drilled three exploration wells this winter. The last one, being drilled near the city if Kenai, is now being completed.

However, seven new gas wells in total drilled this year are less than half the 18 new wells estimated to be needed each year if the region's gas reserves are to be sustained.

The estimate was done for the regional utilities in 2010 by Petrotechnical Resource Alaska, an Alaska-based petroleum-consulting firm.

Meanwhile, Southcentral electric utilities have kicked off construction of a number of new gas-fueled power generation facilities, but there are questions about where the gas for these new plants will come from.

Chugach Electric Association and Municipal Light and Power have the new $369 million Southcentral Power Project plan underway in south Anchorage.

Matanuska Electric Association's new $250 million gas-fired generation plant in Eklutna is in the early stages of permitting.

Homer Electric Association also has two new, smaller power generation projects, one that has started construction.

The Regulatory Commission of Alaska has approved Chugach's request to pass its share of the Southcentral power plant costs, about $200 million, on to its customers. A similar request is anticipated from ML&P for its one-third share, RCA chairman Bob Pickett said.

Although the turbines in the new facilities will be more efficient, typically using a third less gas to generate power than older equipment now used, the net result may still be an increase in total gas use.

It isn't clear where the gas will come from. A gas pipeline from the North Slope is years away, if it can even be built. Several utilities, including the regional gas utility, Enstar Natural Gas Co., are working on possible imports of liquefied natural gas.

"There's not much we can say about it right now," Enstar spokesman John Sims said.

Jim Posey, ML&P's general manager, said about the same.

"I'm much more encouraged about this than I was three months or six months ago," Posey said. He said he hopes to be able to talk in more detail sometime in the summer.

Pickett, at the RCA, said the regulatory commission wants to know about this, however.

The commission will ask the utilities to tell it where things stand on possible LNG imports in a meeting in late May or early June, Pickett said.

Although the pace of drilling isn't enough, there are some positive developments for the regional gas supply pictures.

Enstar is now taking delivery of gas from the small North Fork gas field on the Kenai Peninsula near Homer, Enstar said.

Armstrong Oil and Gas, a Denver-based independent company that owns the North Fork field, began deliveries in early April, Enstar spokesman Sims said.

The utility is taking about 15 million to 25 million cubic feet of gas daily, although this is expected to increase. Enstar's contract with Armstrong calls for the company to deliver 1 billion cubic feet of gas per year.

Enstar built a $21 million, 21-mile, eight-inch pipeline from an existing pipeline from Ninilchik to Anchor Point, where it has linked with two four-inch pipelines built by Armstrong from the North Fork field.

Armstrong is now producing from two wells at North Fork and has drilled two more wells, Sims said.

Companies operating producing fields in the region have four new production wells planned. Marathon Oil Co. plans one well in the Ninilchik gas field on the Kenai Peninsula. Marathon also plans two new production wells on the Steelhead platform in Cook Inlet. Marathon owns the platform, which produces gas, although Chevron Corp. manages production operations.

One new production well is planned for the Beluga gas field, according to Municipal Light & Power, which owns a third of the field.

Exploration wells drilled this winter meanwhile have found some gas, although it is too early to know if they can be produced.

Linc Energy, an Australian independent, reported finding gas at its test well drilled in the Matanuska Susitna Borough late last fall, although testing is now under way on possible production.

Nordaq Energy completed an exploration well on the Kenai Peninsula in April, and although results weren't announced the company said it is working on permits for surface facilities, a good sign.

Buccaneer Energy Ltd. is now completing its exploration well, also on the Kenai Peninsula. The well has encountered gas shows but whether these can be produced remains to be seen.

There are also plans for two jack-up rigs to be operating in deeper waters of Cook Inlet this summer. One rig is now being transported to the Inlet by Escopeta Oil and Gas, another independent.

Buccaneer Energy plans to bring a second, larger jack-up rig to the Inlet this summer.

Both companies own leases with prospects that will be tested by the two jack-up rigs.

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Buccaneer Gets ADEC Nod for Drilling Offshore Cook Inlet

Buccaneer Gets ADEC Nod for Drilling Offshore Cook Inlet

Thursday, April 07, 2011

Buccaneer Energy Ltd.

Buccaneer advised that the Alaska Department of Environmental Conservation ("ADEC") has reviewed Buccaneer's February 1, 2011 permit application for the offshore Cook Inlet Exploratory Drilling project and has issued a preliminary decision to approve the permit application.

As the Air Quality Permits are the longest lead time permits to obtain, taking a minimum 180 days, this milestone is an important step towards drilling the Company's offshore Cook Inlet projects.

The Company already held Air Quality Permits for two drilling locations in the offshore Cook Inlet, one at each of the Southern Cross Unit and North West Cook Inlet Unit. This application was in respect to an Air Quality Permit for an additional two drilling locations, one at each of the Southern Cross Unit and North West Cook Inlet Unit.

Extensive air modeling at each drilling location was required as part of the Air Quality Permitting process. This air modeling is required to assess the impact of emissions on the environment from a drilling rig and support vessels at the particular drilling location.
ADEC is now providing opportunity for a 30 day public comment period which expires on May 2, 2011.

AIDEA Invests in Cook Inlet Rig

AIDEA Invests in Cook Inlet Rig

Wednesday, April 06, 2011
Buccaneer Energy Ltd.

Buccaneer advised that the board of the Alaskan Industrial Development and Export Authority (AIDEA) voted unanimously to invest up to US $30.0 million, as a joint owner, in the acquisition of a jack-up rig.

A Joint Ownership Agreement (JOA) is expected to soon be executed between the Company's subsidiary Kenai Offshore Ventures, LLC (KOV) and AIDEA. The joint project has been named Project Endeavour.

The JOA contains 15 Conditions Precedent that must be finalized prior to draw down of the AIDEA investment. The Company considers 5 of the Condition Precedents to be Material Conditions Precedent and these are listed in Schedule 1. The Company is confident that all the Condition Precedents can be met in a timely manner.

AIDEA's involvement and investment is as a Preferred Owner of the jack-up rig with an initial 85.7% interest in the Joint Project. KOV will be the sole Common Owner with a 14.3% initial interest in the Joint Project.

The following are the main features of AIDEA's Preferred Ownership interest:

• AIDEA's 85.7% Preferred Ownership interest in the Joint Project will be repurchased over a period of 6 years using cash flow generated by contracting of the rig for drilling operations. AIDEA's Preferred Ownership interest will be canceled as it is repurchased so that on conclusion of the repurchase program KOV will be the 100% owner of the jack-up rig;
• AIDEA will be paid a fixed annual dividend of 8.0%, paid semi-annually in arrears, on the Preferred Owner's outstanding balance of the Principal Repurchase;
• AIDEA's Preferred Ownership interest will be repurchased by way of an annual payment, in arrears. The repurchase schedule commences when the jack-up rig is delivered to the Cook Inlet ready for drilling operations; and
• Any dividend payment or Principal Repurchase that is not made in a 12 month period will accrue to the following 12 months.

The Company anticipates that the total cost of the acquisition, modification and mobilization of the jack-up rig to the Cook Inlet from its current location will be approximately US $85.0 million.

 

Exclusive Use Rights

Buccaneer will have the first right of refusal to utilize the rig until the conclusion of the 2013 drilling season i.e. November 2013. Under the terms of the JOA Buccaneer has committed to drilling a minimum of 4 wells in the Cook Inlet using the acquired jack-up rig.

Cook Inlet Energy to Restart Production at Osprey Platform

Cook Inlet Energy to Restart Production at Osprey Platform

Monday, April 04, 2011
Alaska Journal of Commerce

by  Tim Bradner

 

In some much-needed good news for the state's oil and gas industry, Cook Inlet Energy has received approvals on its plan to redevelop the small Redoubt Shoal oil field in Cook Inlet and restart production at the shut-in Opsprey platform at the field, company officials said March 28.

Cook Inlet Energy is a subsidiary of Tennessee-based Miller Energy Resources.

Final state approvals came with an agreement by the state Department of Natural Resources to the company's development plan on March 14 and approval of terms for an additional $12 million to be paid into a performance bond on March 16.

Cook Inlet Energy has begun hiring staff and has workers now on the platform to restart its systems. Company CEO David Hall said the company has hired seven new employees. Contractors being retained will employ more people, he said.

Cook Inlet expects to begin workover operations on three shut-in wells on the platform in April and to begin production soon after.

"We are initially targeting three wells, two that entail replacement of downhole electrical submersible pumps, and should quickly add 400 barrels per day to our production. The third workover well requires reactivation of a previously producing gas well," Scott Boruff, president Miller Energy, said in a statement.

When that work is done the company will turn its attention to additional previously producing wells on the platform, Boruff said. There are eight producing and injector wells on the platform.

Hall said a snubbing unit, a type of small drill rig, will be used in the near-term work, and the unit is now being shipped to Cook Inlet. However, a conventional drill rig will be needed to work over and reactivate the remaining wells.

The company is now looking for a suitable rig. Hall said he hopes one can be found that can also be used in drilling onshore prospects on the west side of the Inlet after the platform work is done.

At its peak the platform produced about 4,500 barrels per day from the Redoubt Shoal field.

Cook Inlet Energy now produces approximately 1,000 barrels of oil equivalent, including crude oil and natural gas, from nearby onshore wells in the West MacArthur River field, which Cook Inlet also owns. The oil is transported by the Cook Inlet Pipe Line to a tanker loading facility at Drift River, on the west side of Cook Inlet.

The Osprey platform and the West MacArthur field were shut down in 2009 when the previous owners, Pacific Energy Resources, declared bankruptcy. Miller Energy acquired the properties in a bankruptcy auction and began plans for redevelopment of both properties.