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Caelus' huge find and Alaska's huge opportunity

Morning Headlamp, October 5, 2016


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The recently announced North Shore oil discovery by Caelus has the industry buzzing. The find, according to Caelus Chief Operating Officer Jim Musselman "has the size and scale to play a meaningful role in sustaining the Alaskan oil business over the next three or four decades." The discovery represents 6 billion barrels of light oil on Caelus' state leases in the Arctic Ocean waters of Smith Bay, located roughly 450 miles northwest of Fairbanks. The discovery is based on 126 square miles of three-dimensional seismic data and a pair of wells drilled this year from ice pads. Caelus Energy Alaska Smith Bay has a 75 percent ownership in the state leases at Smith Bay. NordAq Energy Inc. holds a 17.5 percent interest, and L71 Resources LLC holds a 7.5 percent interest.

 

State incentives played a role in the discovery, Musselman said. "Without the state tax credit programs, none of this would've happened, and I'm not sure Caelus would've come to explore in Alaska," he said in the announcement.

 

Headlamp has already made its voice heard on the discovery, but it's worth repeating: our 600+ members and their 25,000 employees have been hurting. Low oil prices and an unstable business climate have led to thousands of lay-offs. A find like this brings hope.

 

Brigham A. McCown, who previously served as the first acting administrator and interim CEO of the Pipeline and Hazardous Materials Safety Administration (PHMSA) recently opined on the need for offshore infrastructure in the Alaskan Arctic. According to McCown, "The critical point is that the Administration should be looking for ways to stimulate, not impede, industry from making investments in the Arctic. Given the very long lead in times needed to develop offshore resources – at least a decade according to most industry experts – cutting the leases will have precisely the opposite impact. Not only will it effectively ban any offshore activity in the region for the next 20 years, it will start a domino effect across a host of maritime and support services, derailing Alaska's economy and symbolically hanging a "Closed for Business" sign on the door." 

 

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First Reads

Texas oil company announces big offshore Alaska discovery
CNBC, October 4, 2016

Large, new oil field discovered on Alaska's North Slope
KTUU, Cameron MacIntosh and Paula Dobbyn, October 4, 2016

Op-Ed: Alaska's Golden Offshore Opportunity
MarineLink, Brigham McCown, October 4, 2016

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