ANS production down 0.6% from fall in Spring Revenue forecast
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Kristen Nelson Petroleum News
The Alaska North Slope oil price forecast in the Spring 2024 Revenue Forecast, released March 13, is up $1.69 per barrel for the current 2024 fiscal year from the fall forecast and up $2 per barrel for fiscal year 2025, Commissioner of Revenue Adam Crum said in introducing the forecast, while the ANS production forecast is down by 2,800 barrels per day for FY24 and up 13,100 bpd for FY25.
Crum said as a result of the revised outlooks for oil price and production, the forecast for unrestricted general fund revenue -- before transfer from the Permanent Fund Earning Reserve -- is up $58 million for FY24 and up $140 million for FY25.
The price difference, $73.49 per barrel in the spring forecast compared to $71.64 in the fall forecast, is an increase of 2.6%, while the difference in forecast production levels is a decrease of 0.6% for FY24, followed by a 2% increase, 13,000 bpd, for FY25.
In presenting the spring forecast in the Senate Finance Committee March 14, Revenue Chief Economist Dan Stickel said the increase of $58.4 million in unrestricted revenue for FY24 in the forecast is primarily driven by oil price, although the $140.1 million increase for FY25 also reflects a forecast increase in production. On oil price he said that the forecast price was increased by $1 to $3 per barrel over the 10-year forecast period.
FY24 production By field, changes in the production forecast are not particularly large: Prudhoe is down, but production from Prudhoe satellites is up, and the Greater Point McIntyre area at Prudhoe is down. At Kuparuk, production from the main field is up, while that from Kuparuk satellites is down. Endicott is down, Alpine is up and the fields summed up under offshore -- primarily Nikaitchuq, Northstar and Oooguruk -- are up. National Petroleum Reserve-Alaska production is up, while Point Thomson is down.
Total North Slope production is now forecast at 467,600 bpd in FY24, down from 479,400 bpd in FY23, and down from a fall forecast of 470,300 bpd. Cook Inlet, which averaged 9,000 bpd in FY23, is down from a fall forecast of 8,200 bpd for FY24 to 8,200 bpd.
FY25 production For FY25, beginning July 1, ANS production is now forecast at 476,800 bpd, up 2.8%, from a fall FY25 forecast of 463,800 bpd.
The production forecast is unchanged for Prudhoe Bay and Alpine and there are some decreases, the largest for offshore fields, now forecast at 23,700 bpd, down from 25,600 bpd.
Increases in the forecast are for NPR-A, up from 11,600 bpd to 18,700 bpd; Kuparuk, up from 45,700 bpd to 49,300 bpd; Kuparuk satellites, up from 45,700 bpd to 49,300 bpd; Prudhoe Bay satellites, up from 87,100 bpd to 88,200 bpd; and Point Thomson up from 2,800 bpd to 3,400 bpd.
The most significant increases in the forecast, reflecting new fields coming online, are at the end of the forecast period, with FY33 showing 640,200 bpd. Beginning in FY26, production climbs, forecast at 482,000 bpd in that year, and continues to increase, crossing the 600,000 bpd mark in FY32.
Allowable lease expenditures Stickel said an increase is expected in allowable lease expenditures, which he characterized as a barometer of industry activity in Alaska with large investments reflecting new field development.
Capital expenditures are forecast at more than $4 billion in FY24, he said, with further increases in FY25 and FY26. Operating costs also increase, and a graph in Stickel's presentation shows capital expenditures expected to peak in FY26 before declining and surpassed by operating costs by FY30.
The spring forecast shows FY23 deductible North Slope operating expenditures at $2.26 billion and capital expenditures at $4.23 billion, increasing in FY24 to $2.74 billion for operating expenditures and $2.82 billion for capital expenditures, and rising again in FY25 to $2.82 billion in operating expenditures and $3.06 billion in capital expenditures.
--KRISTEN NELSON
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