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NEWS BULLETIN

July 02, 1999 --- Vol. 4, No. 36July 1999

Sale 170 scheduled for Aug. 5

The U.S. Department of the Interior Minerals Management Service said July 1 that sale 170 (Beaufort Sea) will be held in Anchorage Aug. 5. Bids for the 241 whole and partial blocks covering approximately 1 million acres will be opened at 9 a.m. in the Wilda Marston Theatre, Z.J. Loussac Public Library.

Sale 170 concentrates on areas of existing oil and gas activity and leases off Alaska’s central Arctic coast between near the Colville River east toward the Canning River.

MMS said sale 170 will not include blocks off the Arctic National Wildlife Refuge.

BP term prices down again

BP America’s July term price for Alaska North Slope crude is $11.72 a barrel, continuing a drop which began last December. This is the first time BP’s ANS term price has been below $12 a barrel since February of 1994. The price is down 4.95 percent from June’s term price of $12.30 a barrel and down 40 percent from the November 1997 term price of $19.58, the most recent high in BP’s ANS term price.

The year-to-date term price average is $13.32 a barrel, down 35 percent from the 1997 year-to-date average of $20.47 a barrel.

ANS June oil production down

Alaska North Slope crude production was down across the board in June, driven by field depletion, warm temperatures and a planned 12-hour maintenance shutdown of the trans-Alaska pipeline system on June 20. But Cook Inlet production was up, and two North Slope fields, Kuparuk River and Milne Point, had June 1998 production above that for June 1997.

The largest percentage drop was at the Lisburne production center, where June production averaged 167,062 barrels a day, down an average of 12,555 barrels a day (7.5 percent) from May and down 23.4 percent from average production in June 1997. Endicott production averaged 48,827 barrels a day for June, down 4.8 percent, an average of 2,340 barrels a day, from May and down 20.5 percent from June 1997.

The largest per barrel decline was from the Prudhoe Bay field, where June production averaged 584,030 barrels a day, down 13,896 barrels from May, a 2.9 percent decline, and down 16 percent from June 1997.

Kuparuk River production averaged 252,130 barrels a day, down 1.8 percent, 4,558 barrels a day, from May, but up 4.9 percent from June 1997.

Milne Point production averaged 57,169 barrels a day in June, down 1.7 percent, 992 barrels a day, from May, and up 10.3 percent from June 1997 production.

Prudhoe Bay natural gas liquids production averaged 55,426 barrels a day in June, down 2,267 barrels a day from May, a 4.1 percent decline, and a 14.5 percent decline from June 1997.

The only increase in production in the state was for Cook Inlet, where the June average of 33,724 barrels a day was up 950 barrels a day from the May average, 2.8 percent, and a 0.1 percent increase from June 1997.

State okays Point Thomson plan

On the afternoon of June 30, the state approved operator Exxon Company USA's final 15th plan of development for the Point Thomson unit.

After rejecting the plan Exxon submitted in October, the state gave the company six months to put an acceptable plan in place. Three drafts were revised before the final plan was submitted.

Establishing a common database, delineation plans and development planning studies are all part of Exxon's 15th plan for the eastern North Slope unit. Division of oil and gas director Ken Boyd approved the plan through Sept. 30, 1999.

However, Exxon's first obligation - to provide proof that the working interest owners have agreed to share well and seismic data - is only three months away. Boyd wrote in his approval, "The owners shall demonstrate the exchange of sufficient data by Sept. 30, 1998, to map the work contemplated by the 15th POD or the unit will be in default." What must happen within a year from September 1998 to 1999 is that the owners must create a common technical database and consensus maps for all prospective reservoirs within the unit. A presentation of the consensus maps must be made to the state before the 15th plan terminates.

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