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August 31, 2017 --- Vol. 23, No. 26August 2017

North Slope drilling down in first half of year

The North Slope is on pace to experience even steeper declines in development drilling this year than it did last year.

The seven North Slope producer-operators drilled 54 development wells during the first half of the year, down from 76 during the same period in 2016, representing a 28 percent decline. By comparison, the 76 development wells from the first half of 2016 represented an 18 percent decline over the 93 development wells drilled during the first half of 2015.

The figures include wells labeled "development" (also known as production wells) and "service" (also known as injection wells) in the weekly well reports published by the Alaska Oil and Gas Conservation Commission. Some exploration wells are later converted to development wells. Some development wells are reported at a delay after completion. As a result, revised totals could be higher but are unlikely to be lower.

The reduced drilling activity is a steep decline over last year, but lies within historic averages.


Division nixes expansion portion of Point Thomson POD

The Alaska Department of Natural Resources' Division of Oil and Gas has told Point Thomson unit operator ExxonMobil Production Co. to try again on the expansion portion of its plan of development for the unit.

The Point Thomson POD included two plans - one for the initial production system now in operation and one for expansion project planning.

An Aug. 29 decision said the state interprets the 2012 settlement agreement between the state and the Point Thomson WIOs as covering only the original 2012-17 plan of development for the initial production system, or IPS.

The division approved the IPS POD portion of ExxonMobil's submittal based on the unit agreement and state regulations, but said the expansion plan is specific to the settlement agreement, making it a contractual commitment, governed by the settlement agreement and not by the unit agreement and state regulations.

The decision said the expansion project planning POD "is inconsistent with the Settlement Agreement" and contrary to the interests of the state and the public which the division considers when reviewing a POD, but also said the settlement agreement does not prohibit submission of a revised expansion project planning POD and gave ExxonMobil until Oct. 31 to submit a revised POD.


See stories in Sept. 3 issue of Petroleum News, available online Sept. 1 at www.PetroleumNews.com

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