Morning Headlamp Doyon makes a Discovery and Hilcorp Increases Production.

How low can you go? Oil prices fell about 1 percent on Monday to a seven-month low as market players saw more signs that rising crude production in the United States, Libya and Nigeria undercut OPEC-led efforts to support the market with output curbs. OPEC supplies jumped in May as output recovered in Libya and Nigeria, two countries exempt from the production cut agreement. Libya’s oil production has risen more than 50,000 bpd after the state oil company settled a dispute with Germany’s Wintershall, a Libyan source told Reuters.

Oil in Middle Earth would be a win for everyone. An Alaska Native corporation’s third exploration well discovered remnants of crude oil that may have oozed through the area, raising hopes oil can be found elsewhere in large quantities in the Nenana Basin west of Fairbanks. Doyon has said a big gas discovery could lower energy costs for its Alaska Native shareholders. A large discovery of oil or gas could also boost incomes, through new jobs and shareholder dividends related to sales revenue. Oil, far move valuable a commodity than gas, would help Doyon’s bottom line.  Headlamp notes that exploration tax credits have helped Doyon in their efforts. 

Hilcorp sets sights on increased production. With the discovery of an overlooked pocket of offshore oil, Hilcorp’s Cook Inlet production is growing again. The so-called M28 well produced more than 1,000 barrels barrels daily, or about 10 percent of production in the aging basin. Scores of other Inlet wells produce a fraction of that amount, on average. Finding hidden gems is part of Hilcorp’s business plan. The privately held, Houston, Texas-based company rejuvenates old fields after oil and gas production has plummeted. Today, Hilcorp is the Inlet’s dominant producer, owning 15 of 17 offshore platforms in a region where oil and gas production peaked long ago. Hilcorp also elbowed its way onto the Slope, acquiring BP properties in 2014 to become Alaska’s fourth largest producer.

Fairbanks smoke ban requires waivers for burns. Under new smoke bans adopted by the Fairbanks North Star Borough Assembly, to burn wood when the air is bad will require a $100 waiver. “Things are going to have to get more mandatory as we move forward,” Borough Assemblyman John Davies said. Assemblymen Lance Roberts and Guy Sattley were opposed to the new rules. “Registration isn’t helping us solve the problem. This is paperwork,” Roberts said. Previously, burners who knew they had good stoves and dry wood could more or less ignore burn bans so long as their chimneys weren’t puffing out too much smoke. This winter, only those with a waiver will be allowed to burn during a Stage 1 ban. During a Stage 2 burn ban, no wood or coal burning will be allowed in the Air Quality Control Zone, which encompasses large portions of Fairbanks and North Pole. The borough is under pressure from the U.S. Environmental Protection Agency to reduce smoke pollution on winter days when the air is stagnant.

 

First Reads

Recovering from Cook Inlet leaks, Hilcorp targets increased production in Alaska

Alaska Dispatch News, Alex DeMarban, June 19, 2017

New smoke pollution rules make it harder to ignore burn bans

Fairbanks Daily News Miner, Amanda Bohman, June 20, 2017

Oil falls to seven-month low on more signs of growing crude glut
Reuters, Scott DiSavino, June 19, 2017

Evidence of oil pushes Doyon drilling campaign forward
Alaska Dispatch News, Alex DeMarban, June 19, 2017

Exxon Mobil lends support to a carbon tax proposal
New York Times, John Schwartz, June 20, 2017