Exxon Mobil Corp. managers and lawyers contend the company is "ready, willing and able" to start drilling wells in a rich, undeveloped North Slope oil and gas field. But they say the state is standing in the way.

The dispute was the subject of a New Year's Eve hearing in Anchorage Superior Court, where an Exxon attorney argued for a drilling permit state officials so far have denied.

The permit is a key aspect of the complex struggle between Exxon and the state for control of Point Thomson, a dormant field that holds tens of billions of dollars worth of oil and gas. Exxon is the dominant leaseholder in the field.

Since 2005, the state has worked to reclaim the field and lease the acreage to new owners, accusing Exxon and other major leaseholders including BP and Chevron of "warehousing" the Point Thomson discovery for decades while investing in projects elsewhere around the world.

The oil companies have responded with a range of legal and administrative actions to try to hang onto their leases in 106,201-acre field. And Exxon says it has a drilling rig ready to work this winter, if only state officials will issue a permit.

In court Wednesday, about a dozen lawyers gathered to spar over a largely technical legal question -- whether Exxon had the right to go to court to seek the permit.

Mark Ashburn, a private Anchorage attorney representing the state, told Judge Patrick McKay that Exxon prematurely filed suit. Ashburn said the state's natural resources commissioner, Tom Irwin, hasn't yet rendered his final decision on the company's request for a drilling permit.

Ashburn urged the judge to postpone a decision on the permit issue until after a bigger question is decided -- whether the leases are dead, as the state argues, or still alive, as Exxon contends.

This will be the subject of a state administrative hearing later this month that could last as long as two weeks, Ashburn said.

"Without valid leases, there should be no permits issued," he said. He referred to Exxon's planned drilling campaign as "a public relations ploy."

Exxon's attorney, John Daum of Los Angeles, argued Irwin already made a final decision to deny the drilling permit with an Aug. 29 letter to Exxon declaring: "You do not have and will not be granted permission to enter the subsurface of Alaska lands without a valid oil and gas lease."

Seeing that Irwin's mind was made up, Exxon had no alternative but to appeal to the court on Sept. 29 for the drilling permit, Daum said.

McKay said he'd try to render a written decision as soon as possible. Ashburn said he wouldn't be surprised to see a ruling within a week.

Managers for Exxon say they have a rig ready to start punching holes right away in the Point Thomson field, located about 60 miles east of Prudhoe Bay. The drilling is part of a $1.3 billion plan to start producing 10,000 barrels a day of condensate, a light form of oil, by 2014.

Irwin has rejected that plan, saying Exxon can't be trusted to carry it out.

Continued court snags could soon doom the company's drilling plans for this winter season. Daum said after Wednesday's hearing he wasn't at liberty to comment on how much time Exxon has before it will have to scrap its drilling plans for this year.

State oil and gas director Kevin Banks said state officials and Exxon representatives continue to negotiate toward a settlement.

He said it's not fair to now characterize the state itself as the roadblock to drilling it long has demanded at Point Thomson.

"We're working on a solution," Banks said.