Alaska regulators grant Mustang Holding a hearing on nearly $937,000 in flaring penalties

The Alaska Oil and Gas Conservation Commission granted Mustang Holding, LLC a public hearing Tuesday on two orders proposing a combined $936,734 in civil penalties for flaring, or burning off, gas at the Southern Miluveach Unit on the North Slope.

The notice of public hearing sets the session for Jan. 7, 2027, at 10 am in Anchorage, with remote participation available.

Other Order 229 proposed $741,520 for 112,303 thousand cubic feet of gas flared without authorization from Nov. 1, 2025, through March 31, 2026, according to the company's own reports to the commission. The commission first granted a hearing on that order alone in August and scheduled it for Oct. 20.

The new notice adds Other Order 231, issued Oct. 16, which proposed $195,214 for 32,833 thousand cubic feet flared from April 1 through July 31. Each penalty is twice the fair market value of the flared gas, which the orders say state law requires.

The commission dates the start of regular production at the unit to Nov. 22, 2025. It says the company was told no well-testing flaring authorization would be granted after Oct. 31, 2025, and found that "the continued flaring was knowing and intentional."

Mustang Holding acknowledged the flaring and the volumes. It argued that regular production had not begun because its permanent production facilities were incomplete, and that the flaring was neither willful nor commercially motivated. The commission agreed that flaring volumes declined each month and that the company did not conceal the flaring, but it kept both penalties as proposed.

Written comments are due to the commission by the close of the Jan. 7 hearing.