Regulatory and fiscal stability are key
to vibrant resource industry
It’s a new day on the North Slope despite the challenges that come with operating in the Arctic – high costs, harsh weather, supply chain issues, legal hurdles and struggles to find adequate financing.
For the first time in a long time North Slope production is projected to remain stable in the near term and increase in the late 2020s. This is excellent news for Alaska. Resource industries, particularly oil and gas, form the backbone of our economy. They are labor intensive, pay some of the best wages in the state and require continued capital investment to maintain or expand production levels. Production is key to jobs and revenue for Alaska.
We cannot control many of the challenges Arctic operations bring, but we can maintain stable tax policies that attract the capital needed to keep our resource industries healthy so they can produce jobs and revenues for Alaskans.
What’s at stake
$3.1B
State & Local Revenue
FY19
77,600
Alaskan Jobs Supported
Direct/Indirect
$549M
Grow the Permanent Fund
FY22 Dedicated Revenues to Corpus
$4.4B
Spending with Local Businesses
Annual
Source: “The Role of the Oil and Gas Industry in Alaska’s Economy,” January 2020, McKinley Research
Letter from the co-chairs
Dear KEEP Alaska Competitive Coalition Supporter,
Alaskans have good cause for celebration. The recently approved Willow project can reverse the last 10 years of population decline and outmigration, provide hundreds of jobs, dramatically increase Alaska’s oil production, fund state services for the next 40 years, provide permanence to the PFD and the Permanent Fund and revitalize Alaska’s economy. At peak production, this major oil project on the North Slope will increase oil production in Alaska by up to 180,000 barrels per day.
Last fall, Santos sanctioned over $2.6 billion to start phase one of the Pikka project, which will produce up to 80,000 barrels per day, giving us another reason to celebrate. This, combined with the Willow project, could mean up to 50% more oil flowing through the pipeline.
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It all started with Pikka. Then came Willow Stirrup, Mitquq and Coyote, fields currently in the early stages of development. They all found riches in what is called the Brookian sequence, a broad range of clastic rocks shed from the ancestral Brooks Range. In aggregate, these discoveries have projected resources in excess of 5 billion barrels.
Now, 70-90 miles to the east, Armstrong Oil & Gas, through its affiliate company Lagniappe, drilled three prospects this winter in its search for new Brookian oil. The three wells (King Street #1, Voodoo #1, Sockeye #1) each targeted large 3D-defined opportunities in an area south of Badami.
“The King Street #1 well was drilled to a total depth of 10,241 feet,” reports Petroleum News. “Hydrocarbons were found in two separate hydrocarbon zones at depths of 8,130 feet and 9,850 feet. Wireline evaluation, sidewall cores and MDT data from the well indicate pay in both lower and upper zones in high-quality late Cretaceous clastic reservoirs.” MDT stands for "modular formation dynamics tester" which analyzes the downhole fluids.
The Sockeye #1 well and the Voodoo #1 did not reach their targeted depths due to operational and weather-related challenges. Both wells were plugged as it was determined there would not be sufficient time to drill and evaluate prior to the end of the drilling season.
"Wildcatting is a challenging endeavor. The wells we drilled this year were located 70-90 miles east of older Brookian topset discoveries. Only two wells had ever been drilled on our 275,000-acre land position (one well/215 square miles)," Bill Armstrong, president of Armstrong Oil & Gas, said.
"Despite the lack of well control, our regional geologic studies indicated evidence for connectivity to a working petroleum system, and our objectives have potential for very favorable (porous and permeable) rock properties," he said. "Additionally, the seismic geometries of our prospects looked similar to older Brookian topset discoveries.”
Exploration partners APA Alaska LLC, an APA (Apache) Corp. affiliate company, and Oil Search (Alaska) LLC, a Santos affiliate company.
A new, independent expert report on Pantheon Resources’ Kodiak field significantly upped the ante for this United Kingdom-based oil and gas company.
The report by Netherland Sewell & Associates (NSAI) increased estimates of recoverable resources by 25% to 1.2 billion barrels of oil, condensate and natural gas liquids, and 5.4 trillion cubic feet of natural gas. The Kodiak field is located south of Prudhoe Bay adjacent to the Dalton Highway and TAPS.
The company has a 100% working interest in the Kodiak and Ahpun projects, which collectively span about 193,000 contiguous acres in close proximity to pipeline and transportation infrastructure on the North Slope. The assessment covered approximately 43,000 acres of Pantheon’s holdings.
The numbers include about 43,000 of the 66,000 acres obtained in a 2023 lease sale and a higher average recovery rate due to the better reservoir properties in the shallower part of the field.
"Discovering a billion-barrel oil accumulation is what companies dream about and the Independent Expert Report by NSAI validates our company's significant achievements over the past decade. We can now turn our attention to development, along with our growing Ahpun resource, to turn these volumes to cashflow and value for shareholders," said Bob Rosenthal, Pantheon’s Technical Director.
Pantheon and its wholly owned subsidiary, Great Bear Petroleum, has been operating in Alaska for more than a decade. www.pantheonresources.com/index.php/projects/kodiak
There’s been a string of good news from the North Slope, including the latest from Australia’s 88 Energy Limited.
The company has been flow-testing one zone of its Hickory-1 well and confirmed a light oil discovery. The Hickory-1 discovery well is located in 88 Energy’s Project Phoenix, on state lands adjacent to the Dalton Highway and the trans-Alaska pipeline.
The test produced a peak flow rate of more than 70 barrels of oil per day, with gravities between 39.9 to 41.4 API, representing a light crude oil. Additionally, some natural gas liquids (NGLs) were produced but not measured.
“The completion of flow testing in this zone and recovery to surface of light oil, in addition to NGLs and associated gas, confirms our understanding of the substantial potential of these reservoirs. Significantly, these flow rates were achieved from only a 20-foot perforated section in a vertical well with a low volume stimulation over a short period,” 88 Energy Managing Director Ashley Gilbert said.
“As previously highlighted, production rates in long horizontal production wells are typically multiples of 6 to 12 times higher than tested in vertical wells, as evidenced in many Lower 48 analogs." More here: www.rigzone.com/news/88_energy_confirms_light_oil_discovery_in_alaska_asset-03-apr-2024-176286-ar...
The mission of KEEP Alaska Competitive is to promote and preserve competitive, fair and stable taxes on Alaska’s resource industries to enhance investment, jobs and production to secure Alaska’s long term economic future.