Should anyone question the impact of SB 21 and Alaska’s anchor tax credits, tell them to look north – and south. Despite staggering industry loses around the world, the North Slope and Cook Inlet are humming with important projects.
In fact, the capital infusion since SB 21 became law reduced North Slope production decline to a mere 1 percent last year.
Here’s a summary of projects:
After completing its first exploration well in Smith Bay, Caelus Energy is drilling its second well. Smith Bay is a promising prospect offshore NPR-A. Caelus is continuing with development activities in its Oooguruk unit, including the Nuna development, which could produce new oil for our pipeline right around the corner, but only with a stable fiscal terms and some price rebound.
The new Conoco-Phillips CD-5 development is performing much better than expected, reaching peak production of 16,000 b/d. The company is now drilling the ninth of 15 production and injector wells and plans a new exploration well near CD-5. Activity remains brisk in NPR-A with development of a production site at GMT-1 and planning for GMT-2. In other news, the company’s Alaska operations escaped another round of capital budget reductions virtually unscathed, thanks to tax reform.
BP is aggressively re-energizing Prudhoe Bay with the completion of eight wells, 46 new sidetrack wells and 420 well workovers last year.
Hilcorp plans 10 development wells and 16 well workovers on its North Slope fields this year.
88 Energy and partner Burgandy Xploration completed a test well of shale resources 65 miles south of Deadhorse and are now conducting extensive seismic in the area.
Arctic Slope Regional Corp.’s AEX subsidiary is drilling a well on ASRC-owed state leases and Great Bear Petroleum has a large seismic program under way.
Oil production in Cook Inlet now averages 18,000 b/d, the highest since 2011, primarily due to Hilcorp. The company has invested more than $1 billion in Cook Inlet projects and drilled over 50 wells. “It’s no secret that Alaska’s tax credit system and the Cook Inlet Recovery act were key drivers in bringing Hilcorp to Alaska in our investments to date,” Hilcorp recently told House Resources. You can read their testimony here.
Also in Cook Inlet, Furie Operating Alaska is selling gas from its new platform and has a jack-up rig en route to Alaska.