re: Administration cancels remaining oil and gas leases in Alaska’s Arctic Refuge

Nothingburger. The Alaska Industrial Development and Export Authority held these leases just in case major oil companies would find interest. Not one has and none ever intended, especially after all major banks announced they wouldn't finance o&g projects in the artic.

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Gas prices are set on futures. That’s why gas prices are not calculated in inflation. When future forecasted production is down gas prices go up.

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US oil production is at or near peak domestic historical production rates and will continue to tick up. Last week the US reached 12.8 million barrels per day production. The high was 13.1 million per day in Q1 2020, just before the pandemic. We will reach and exceed this number soon as the industry continues to recover.

Your gas futures will not be affected by the drop in the bucket oil production that comes out of Alaska which is currently 437k barrels per day. Alaska reached peak production in the 1980’s and has steadily declined since then. You are talking about making huge investments for little return in this market. Companies that are interested in making a profit won’t have a big interest in investing in Alaska which is whey they are not seeing much interest in their lease sales.
There may be a time in the future when Alaska becomes more attractive but that time is not right now.

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You are wrong. Outside of early exploration programs, we build ice to build infrastructure.

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So what is your proposal here? We build a bunch of roads and pads across the Alaskan landscape so O&G companies can drill year round? What’s wrong with using the natural ice that melts each spring and renews each winter? Do we really want to pock the Alaskan landscape with roads and permanent drill site pads? And before you accuse me again of not knowing what I’m talking about, I have over 25 years in the industry working all over the globe. I think that should at least partially qualify me to speak about it..

I don’t know anything about drilling in Alaska, but would it be a bunch of vertical wells like your picture?

I was thinking even full development would be horizontals and likely with drill island and corridors for roads, pipelines and power lines to keep disturbance to a minimum.

But I’m just guessing here.

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I was thinking even full development would be horizontals and likely with drill island and corridors for roads, pipelines and power lines to keep disturbance to a minimum

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I am not 100% certain but pretty sure most (if not all) of Alaska's production is from conventional reservoirs. We are able to frac unconventional shale reservoirs in the lower 48 due to the infrastructure in place able to haul water/sand/material on a continuous basis

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I am not 100% certain but pretty sure most (if not all) of Alaska's production is from conventional reservoirs. We are able to frac unconventional shale reservoirs in the lower 48 due to the infrastructure in place able to haul water/sand/material on a continuous basis

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Yes they are all conventional plays which means it wouldn’t be factory drilling like in the Lower 48. I went back and looked at historical rig count and lease sales for Alaska. Since 1990 Alaska has averaged 10 active land rigs and they are currently at 9. Lease sale data is sort of interesting. Alaska went from 1984 to 1999 with open bids on tracts. That first sale in 1999 was the most active then it tapers off. Most of the companies bidding in those early sales are not even active in Alaska anymore. Anadarko was the most active for obvious reasons. ConocoPhillips has been the most consistent.

Year Companies Bids
1999 6 174
2002 5 69
2004 4 165
2006 3 87
2008 4 150
2010 1 5
2011 3 17
2012 2 14
2013 3 21
2014 2 2
2015 1 6
2016 4 31
2017 1 7
2018 3 16
2019 4 92

Yr Tracts Offered Tracts Receiving Bids
1999 UNK 174
2002 UNK 69
2004 UNK 165
2006 UNK 87
2008 UNK 150
2010 UNK 5
2011 UNK 17
2012 UNK 14
2013 380 22
2014 248 5
2015 143 6
2016 145 27
2017 900 7
2018 254 16
2019 350 92
2021 22 13

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Yes they are all conventional plays which means it wouldn’t be factory drilling like in the Lower 48.

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So does this mean 40 or 160 acre spacing verticals and not drill islands with corridors for exploration?

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US down 129
International up 92

Hooray for energy dependence!

Biden better be announcing loads of new nuclear power plants