The State of Alaska generated an emergency response team with a unified command composed of representatives of the coast guard, the state of Alaska and CIPL. On April 4, 2009, subsequent another large outbreak, the drift river terminal was wholly with drawn and the unified command took the decision to not restart operations until the volcano has been declared dormant by the Alaska Volcano Observatory.
As a result, Chevron, as operator of the trading bay and McArthur River fields, has shut in jointly-owned production due to a lack of storage capacity. Pacific Energy owns a 46.8% interest in this production, which amounted in the fourth quarter of 2008 to 2,502 barrels of oil equivalent per day (boe/d) for Pacific Energy’s interest. With the commencement of the fourth quarter of 2008, and earlier to Pacific Energy’s filing for chapter 11 bankruptcy protection on March 9, 2009, the company’s oil sales revenue from this production were being counterbalanced against monthly expenditures incurred by Chevron on behalf of Pacific Energy. The procedure for oil sales is subsequent to the filing is before the bankruptcy court.
Regarding production operated by Pacific Energy, the company has enough storage capacity for another 60 days about, based on existing production rates. This production averaged 1,178 boe/d for the fourth quarter of 2008.
Pacific Energy remains in compliance with the terms of its debtor-in-possession financing.
