Explorersexplorersthe Oil & Gas Companies Investing in Alaska’S Future

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Explorersexplorersthe Oil & Gas Companies Investing in Alaska’S Future ExplorersExplorersThe Oil & gas companies investing in Alaska’s future The Explorers, an annual publication from Petroleum News EXPERTS in Resource Development & Heavy Civil Construction COMPANIES BUILDING ALASKA FOR MORE THAN 35 YEARS Cruz Construction | Alaska Interstate Construction | Alaska Aggregate Products | Cruz Energy Services | Cruz Marine A CIRI Company A CIRI Company • Commercial Diving • Marine Construction Services • Platform Installation, Maintenance and Repair • Pipeline Installation, Maintenance and Repair • Underwater Certified Welding • NDT Services • Salvage Operations • Vessel Support and Operations American Marine Services Group 6000 A Street, Anchorage, AK 99518 • Environmental Services 907-562-5420 • Oil-Spill Response, Containment and Clean-Up Deadhorse, AK • Hazardous Wastes and Contaminated Site Clean-Up and Remediation 907-659-9010 • Petroleum Vessel Services, e.g. Fuel Transfer www.amarinecorp.com • www.penco.org • Bulk Fuel Oil Facility and Storage Tank [email protected] Maintenance, Management, and Operations Anchorage Honolulu Los Angeles Arctic Services Emergency www.pts-technology.com Response The Production Enhancement Company Exploration Well Testing Water Treatment Pipeline Remediation 907.344.2024 DEVELOPING Flowback ALASKA’S ENERGY Permanent FUTURE Monitoring System THE EXPLORERS 3 Alaska’s Oil & Gas Consultants Geoscience Engineering Operations Project Management From the North Slope to Cook Inlet, PRA’s professional and highly skilled consultants know and understand the regional geology, the unique operating conditions, and the regulatory environment, having managed exploration and development projects across Alaska since 1997. 3601 C Street, Suite 1424 907-272-1232 www.petroak.com Anchorage, AK 99503 [email protected] 4 THE EXPLORERS WELCOME High highs, low lows for exploration Exploration drilling is down, but discoveries have far surpassed expectations By ERIC LIDJI year. ASRC Exploration LLC finally oper- the Nenana basin. The company is cur- For Petroleum News ated its first North Slope exploration well rently partnering on its exploration pro- after nearly two decades as an informal gram with Cook Inlet Region Inc. here are a lot of mixed messages in “apprentice” to other North Slope opera- The third trend is the ongoing story of TAlaska oil and gas exploration at the tors. And Doyon Ltd. continues to see op- unconventional oil exploration. moment. portunities for an oil and gas discovery in The recently completed winter explo- continued on page 8 ration season generated only one well and an associated sidetrack at the Horseshoe project, although Accumulate Energy Inc. was still planning to drill its Icewine No. 2 well as this issue of the Explorers was going to print. Either way would give 2017 the small- est North Slope well count since 2011. But while exploration drilling has been sluggish for several years now, explo- ration results have rarely been as exciting. Between early 2016 and early 2017, Arm- strong announced a 1.2 billion barrel dis- covery between its Pikka unit and the associated Horseshoe prospect; Caelus an- nounced a 6 billion to 10 billion barrel dis- covery in Smith Bay; and ConocoPhillips announced a 300 million barrel discovery at its Willow prospect. If developed, those three discoveries would impact North Slope development for decades. A small number of wells and a large number of discoveries would seem to sug- gest a disparity between outlook and real- ity. But more likely it represents the oddities of Alaska, where only a few com- panies are operating in a region with large opportunities. Providing camps, lodging operations, catering, facility To better understand the state of Alaska exploration, consider four trends: and life support systems since 1973 The first trend is the Nanushuk forma- tion. The major discoveries of the past year were all in the Nanushuk or the closely as- sociated Torok formation, and are be- lieved to represent a new type of play on the North Slope. Early indications suggest that the next few years could led to more discoveries in this Brookian play, as com- panies directly target those two forma- tions with exploration wells. Anywhere... Anything... Anytime... On Time! The second trend is increased activity from Alaska Native corporations. After decades of relying on private sec- tor companies, Ahtna Inc. took the lead on exploration activities in the Copper (907) 562-5588 ArcticCatering.com River region near Glennallen this past THE EXPLORERS 5 CONTENTS The Explorers 13 Released May 28, 2017 THE EXPLORERS is a special annual supplement to Petroleum News, which is owned by Petroleum Newspapers of Alaska LLC. MAILING ADDRESS: PO Box 231647 Anchorage, AK 99523-1647 Phone: (907) 522-9469 Fax: (907) 522-9583 Email: [email protected] Web page: The Explorers www.PetroleumNews.com To order additional copies of this special publication, contact Heather Yates at [email protected] 11 Accumulate 24 Caelus Energy 62 Furie Cover photo, an aerial of the Tolsona No. 1 drilling pad, courtesy 12 Ahtna 51 ConocoPhillips 65 Glacier of Ahtna, Inc. ©2017 Judy Patrick Photography 13 Armstrong 55 Doyon 67 Great Bear Printed by Century Publishing, 17 ASRC 59 ENI 68 Hilcorp Post Falls, Idaho RESOURCERESOURCE DEVELOPMENTDEVELOPMENT COUNCILCOUNCIL 121 WestWest Fireweed Lane, Suite 250, Anchorage, AK 99503 UHVRXUFHV#DNUGFRUJ OHDUQ PRUH DW DNUGFRUJ GrowingGrowing AAlaskalaska TThroughhrough RResponsibleesponsible RResourceesource DDevelopmentevelopment Resourcece Development Council @alaskardc 7KH5HVRXUFH 'HYHORSPHQW &RXQFLO IRU $ODVND LV D VWDWHZLGH QRQSUR¿W PHPEHUVKLSIXQGHG RUJDQL]DWLRQPDGH XS RI EXVLQHVVHV DQG LQGLYLGXDOV IURP DOO UHVRXUFH VHFWRUV DV ZHOO DV 1DWLYH FRUSRUDWLRQVVXSSRUW VHFWRUV ODERU XQLRQV DQG ORFDO JRYHUQPHQWV 7KURXJK 5'& WKHVH LQWHUHVWV ZRUNWRJHWKHU WR SURPRWH DQG VXSSRUW UHVSRQVLEOH GHYHORSPHQW RI $ODVND V UHVRXUFHV 6 THE EXPLORERS Ad Index 40 Advertisers MARTI REEVE 22 SPECIAL PUBLICATIONS DIRECTOR KAY CASHMAN Welcome PUBLISHER & EXECUTIVE EDITOR High highs, low lows for exploration KRISTEN NELSON 5 EDITOR-IN-CHIEF ERIC LIDJI Guest Editorial CONTRIBUTING WRITER STEVEN MERRITT 10 Long-term vision critical now PRODUCTION DIRECTOR MARY MACK Celebrating 40 years CHIEF FINANCIAL OFFICER SUSAN CRANE of Prudhoe production ADVERTISING DIRECTOR RENEE GARBUTT 26 BP’s top Alaska exec speaks out CIRCULATION MANAGER HEATHER YATES 28 Christmas at Prudhoe Bay BOOKKEEPER JUDY PATRICK Celebrating the 40th CONTRACT PHOTOGRAPHER anniversary of TAPS Maps courtesy of the Alaska Department of Natural 40 Looking back to beginning, startup Resources, Division of Oil and Gas Maps d ar 36 North Slope & Beaufort Sea y T Nikaitchuq 36 he Oooguruk Northstar Cook Inlet basin Milne Explorers 38 Point Oil & gas Beechey companies Point Dewline investing in Alaska’s future Bear Pikka Duck Colville Placer Kuparuk Tooth River Island River Prudhoe Licensing Bay Libert Southern Greater Miluveach Mooses Tooth Hwy. The Explorers, an annual ton publication from Petroleum News State managing 5 exploration licenses l 8 Da Kuparuk River LASKA PIPELINE A S- THE EXPLORERS 7 State managing 5 exploration licenses Interest in the program waxes and wanes but is crucial for certain opportunities By ERIC LIDJI As of early 2017, according to information available on the For Petroleum News Alaska Division of Oil and Gas website, the state was overseeing three current licenses (Healy, North Nenana, and Tolsona basins) he state of Alaska launched the exploration license program to and two pending requests (Gulf of Alaska and Houston-Willow Tcreate a pathway for companies to explore corners of the state basins). excluded from the regular cycle of lease sales. And although no production in the state can yet be traced to the Healy program, exploration licensing can take credit for a range of drilling The three current licenses cover activities in the Interior region. programs, especially in the Interior. Usibelli Coal Mine Inc. applied for an exploration license in the The program creates a system that mimics the competitive as- Healy area in April 2004, looking to add natural gas exploration to pects of lease sales, which are designed to fulfill the “maximum its traditional coal mining operations. benefit” clause in the state constitution. Every April, the Alaska De- The state issued a favorable review of the project, but local partment of Natural Resources accepts applications for potential ex- groups challenged the project on environmental grounds, leading ploration licenses covering areas between 10,000 and 500,000 acres. to a decade of cases that were resolved in 2014. The applicant proposes the geographic area, a work commitment The state eventually approved the 204,883-acre Healy basin ex- and a term limit. The process allows other companies to make com- ploration license for a 10-year term starting at the beginning of 2011, peting bids, in an effort to get the best deal for the state. which gave Usibelli until the end of 2020 to conduct exploration ac- tivities. The license required a $500,000 work commitment. Usibelli met the work commitment by drilling the 1,265-foot HC EXPLORATION continued from page 5 No. 1 coal-bed methane test well in mid-2014. The company ini- tially permitted a four-well program, to provide operational flexi- Both Accumulate Energy Inc. and Great Bear Petroleum bility, but has only drilled one well to date. “It was successful in Operating LLC have decided to accompany their longer- confirming the existence of gas in the basin,
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