New oil found near TAPS line
London-based independent Pantheon Resources is in development planning for a small oil discovery in the central North Slope south of the large Prudhoe Bay field. Pantheon drilled a new well off the Alkaid 1 well drilled in 2015 and achieved a test flow rate 80 barrels per day to 100 barrels per day of high quality light 40-degree API oil from a six-foot well section. Pantheon believes the discovery can be commercially developed with horizontal wells and stimulation. Unlike many oil discoveries on the slope that are remote, requiring expensive infrastructure, Alkaid is adjacent to the Dalton Highway and the Trans Alaska Pipeline System.
“The flow rate indicates the potential of higher rates when conventional North Slope production techniques like horizontal wells and stimulation is applied to larger intervals of reservoir,” Pantheon said in a statement. The test was conducted in a 240-foot interval of oil-saturated reservoir. The new find has also upgraded the potential of an adjacent oil accumulation which can be developed from the Aklkaid location.
Alkaid was originally drilled by Alaska-based independent Great Bear Petroleum. Pantheon acquired Great Bear in January. At the time Great Bear was pursuing deeper prospects for shale oil production from large shale formations that are known source rocks for the large producing oil fields farther north, including Prudhoe Bay. Great Bear drilled two shale tests including Alkaid but failed to find sufficient oil in the shale for commercial development.
BP income $916 million
BP reported $916 million in oil production net income from Alaska in 2018 based on total production revenues of $4.3 billion. In comparison, net income in 2017 was $830 million on $3.3 billion in sales revenues. BP officials in Alaska credited higher oil prices with the increase in revenue and net income. The company paid $804 million in production and property taxes and royalties to the state in 2018. BP said the production revenues and net income do not reflect the company’s overall Alaska financial situation. When income and costs for “midstream” infrastructure are included, mainly BP’s holdings in the Trans Alaska Pipeline System and its marine tanker transportation system, the 2018 profit drops to $531 million. That’s mainly because margins on the pipeline and tankers are lower than those for oil production.
Slope production still lower
Alaska oil production is still 25,000 barrels a day below last year’s volumes for the first two months of the year but oil prices were trending up, according to data gathered by the University of Alaska’s Institute of Social and Economic Research. Production data shows a 4.7 percent decline for January and February compared with the same two months of 2018. Alaska North Slope crude oil prices, however, averaged $67.21 per barrel between Jan. 1 and March 12 compared with an average of $63.35 per barrel for the same period of 2018.
Bernhardt new DOI Secretary
The U.S. Senate confirmed David Bernhardt as Secretary of the Interior. Bernhardt had been Deputy Secretary until Ryan Zinke’s resignation as Secretary. Bernhardt’s elevation may mean that Joe Balash, an Alaskan who is now Assistant Secretary for Lands and Minerals, may be moving up. Balash, with Bernhardt’s backing, is managing the department’s effort to get lease sales underway in the Arctic National Wildlife Refuge coastal plain. Hopes have been for a sale late this year.