Headlamp – Doyon + CIRI = millions invested in Alaska.  

Doyon + CIRI = $20-$30 million invested in Alaska. Two regional Native corporations are teaming up for another shot at unlocking oil and gas in Interior Alaska in what could be a $25 million drilling effort. Anchorage-based Cook Inlet Region Inc. announced Monday it will join Doyon Ltd. as a partner on a second oil and gas exploration well in the little-explored Nenana basin west of Doyon’s Fairbanks headquarters. Doyon, Alaska’s largest private landowner, has drilled three wells but has yet to find commercial discoveries of oil and gas in the region, in an effort dating back more than a decade. Petroleum exploration is high risk, but with potentially huge rewards if a big discovery is made, said Ethan Schutt, CIRI senior vice president of land and energy development. CIRI is the largest private landowner in Southcentral Alaska. The project is expected to cost $20 million to $30 million, Schutt said Tuesday.

Who’s to blame – the state or Furie? Department of Natural Resources officials issued a notice of default to Furie Operating Alaska Dec. 26 for failing to make good on its drilling commitments in the Kitchen Lights Unit the company operates. In a letter to the company’s Alaska leaders, DNR Commissioner Andy Mack recalled the drilling plans the company submitted to the agency since 2015 that went unmet. “Operation of the KLU previously and up through the present reflects a history of committing to drilling activities, but then delaying or changing those work commitments,” Mack wrote. The Kitchen Lights Unit is a large natural gas producing unit in the central part of Cook Inlet north of Nikiski and east of Trading Bay. Mack continued to note that Furie said it would drill two development wells in its 2015 plan of exploration, but in August that year proposed deferring that work until 2016. The change was approved by the Division of Oil and Gas. “Although the Randolph Yost jack-up rig was 100 percent staffed to commence drilling operations in April of this year, Furie was forced to delay its 2017 drilling plans — including purchasing tangible items with substantial lead times — until additional funding for the purchase of tax credits was approved by the Legislature and the governor,” Furie’s 2018 Kitchen Lights development plan states.

Don’t slow your mustang down. Positive results from a well test have helped give a small independent oil company another shot at finally developing its North Slope prospect. Anchorage-based Brooks Range Petroleum Corp. announced Jan. 8 that a late November flow test of the North Tarn 1-A at its Mustang oil project produced peak flows averaging 1,292 barrels per day with only small amounts of water. The test confirms the company’s prior assumptions and Brooks Range expects the results will lead to accelerated development of the Mustang project, according to a press release. “This recent success is very encouraging and highlights the dedicated and persistent support invested by the working interest owners, state agencies and the contracting community. These results confirm we are on the right track with our development plans,” Brooks Range CEO Bart Armfield said in the release.

Blah, Blah de Blasio…. New York City is suing five oil companies over climate change. The city is suing BP, Chevron, ConocoPhillips, Exxon Mobil and Royal Dutch Shell, according to The Associated Press. New York alleges the five major oil companies have played a role in global warming, the AP reported and is seeking to recoup billions of dollars spent preparing for climate change. The city previously said it was going to divest its five pension funds from fossil fuel companies, according to the AP. In a statement about plans to divest, de Blasio said New York City is “standing up for future generations by becoming the first major US city to divest our pension funds from fossil fuels.”

From today’s Washington Examiner, Daily on Energy:

OIL GROUP BLASTS ‘PREMATURE’ DECISION TO BLOCK EASTERN GULF DRILLING: The American Petroleum Institute criticized the Trump administration Wednesday for its “premature” decision to remove the eastern Gulf of Mexico from its offshore drilling plan. “This announcement is premature,” said CEO Jack Gerard. “Americans support increased domestic energy production, and the administration and policymakers should follow the established process before making any decisions or conclusions that would undermine our nation’s energy security.” Lost opportunity: API, the largest trade group for the oil and natural gas industry, and others in the energy industry had been excited about drilling in the eastern Gulf, more so than any other area proposed by the Trump administration. That’s because it is close to existing pipelines and processing facilities in the western Gulf as well as refineries in Texas and Louisiana. Oil and gas production in the western Gulf, which accounts for almost all current U.S. offshore production, is expected to hit a record high in 2018, after suffering three years of losses.

First Reads:

Native corporations team up again in hunt for oil and gas in Interior Alaska
Anchorage Daily News, Alex DeMarban, January 10, 2018

DNR issues default to Furie for failure to drill
Alaska Journal of Commerce, Elwood Brehmer, January 10, 2018

Regulators hopeful well test can jumpstart Mustang oil project
Alaska Journal of Commerce, Elwood Brehmer, January 10, 2018

New York City suing major oil companies over global warming
The Hill, Rebecca Savransky, January 10, 2018