Morning Headlamp — Massive North Slope Find for Repsol and Armstrong

Big find! Spanish oil company Repsol, working with Armstrong Oil and Gas announced Thursday what it’s calling the largest onshore U.S. oil discovery in three decades. According to the companies, wildcat wells drilled this winter at a prospect known as Horseshoe discovered bands of light oil, a find that extends the already huge Nanushuk play by an additional 20 miles to the south. Repsol said that the contingent resources of recoverable light oil found near the village of Nuiqsut on the North Slope, would allow production of 120,000 barrels per day starting from 2021.

Now, with Repsol saying the play is known to extend to the south, additional production beyond the original estimate can be expected to increase from the 2015 estimates. The Horseshoe wells were about 12 miles south of Nuiqsut. Repsol holds a 25 percent working interest in the Horseshoe discovery and a 49 percent working interest in the Pikka Unit. Armstrong is the operator and holds the rest of the leases, the statement said. The companies estimate first production in 2021.

The announcement was hailed by Gov. Bill Walker and state Sen. Cathy Giessel, who chairs the Senate Resources Committee. But it laid bare a divide in the Alaska House over proposals to overhaul the state’s oil tax and credit structure. Lawmakers are debating whether to further reduce incentives aimed at encouraging oil activity amid a multibillion-dollar state budget deficit.

This is truly amazing news for Alaska and the oil and gas industry. Policy matters. Stability matters.  Production matters. 

Smith Bay. Caelus Energy announced last fall that it had discovered a field with over 2 billion barrels of recoverable oil in Smith Bay, and possibly more in nearby areas. The next challenge will be getting it out. Smith Bay is 100 miles west of the start of the Trans-Alaska Pipeline in Prudhoe Bay. According to KCAW, Caelus’s Casey Sullivan told the Sitka Chamber, “This is a world-class find. And for someone like Jim Musselman, this is his third opportunity exploring in a different region, and he’s struck gold again.”

 

First Reads

Companies claim largest US onshore oil discovery in 30 years
CNBC, March 9, 2017

Lawmakers stake positions on oil credits amid news of North Slope find
KTVA, March 9, 2017

Officials react happily to news that a North Slope oil discovery, already described as huge, just got a lot bigger
Alaska Dispatch News, Alex DeMarban, March 9, 2017

A small company prepares for challenges of Smith Bay oil field
KCAW, Robert Woolsey, March 9, 2017

State concerned about tanker escort design for Prince William Sound
Alaska Public Radio News, Rachel Waldholz, March 9, 2017

Short-lived proposition to cut funds for Alaska’s gasline corporation dies in committee
Alaska Public Radio News, Rashah McChesney, March 9, 2017

Panel begins review of Alaska legislative allowance
Juneau Empire, Becky Bohrer, March 9, 2017