Caelus is evaluating its plans; oil price & fiscal issues at fore

Faced with issues surrounding Alaska’s fiscal system, the veto of state tax credits by Gov. Bill Walker and the continuing downward pressure on the price of oil, Caelus Energy sees uncertainty over its future plans, Casey Sullivan, Caelus Alaska director of public affairs, told Petroleum News Aug. 8.

“Those (issues) all go into the final hopper for planning and none of those are looking overly optimistic,” Sullivan said. “We’re continuing to evaluate our future plan and are hopeful for an additional price uptick and a time when we see some certainty in the fiscal system.”

In May, faced with continuing low oil prices, Caelus suspended development drilling in the company’s Oooguruk oil field, offshore the North Slope. The Nuna project, a planned expansion to the Oooguruk field, is also on hold. Last winter the company drilled two exploration wells in Smith Bay, about 59 miles southeast of Barrow and reported a possible large oil find. The company has been planning to return to Smith Bay for further drilling next winter.

In November 2015, prior to last winter’s drilling at Smith Bay, Sullivan told the Resource Development Council’s annual conference that Caelus’ Smith Bay exploration project would not be possible without the partnership of the state through its tax credit program.

- ALAN BAILEY