Q&A with Glacier Oil & Gas CEO Carl Giesler: Development, political changes, and Cook Inlet.

• Position: OIL & GAS

Alaska Business is pleased to highlight Glacier Oil & Gas; the company's CEO Carl Giesler provides insight into the company and oil and gas development in Cook Inlet.

Alaska Business: What are your plans for 2018 in Cook Inlet?

Giesler: Generally, in the Cook Inlet, Glacier plans to continue developing our oil assets off the Osprey Platform at our Redoubt Unit. In particular, we plan to replace the ESP and add perforations to RU-09 and add another low-on-structure water-injection well, RU-04.

We also look forward to drilling next summer our Sabre oil prospect just northeast of our West McArthur River Unit. That field and our Starfish prospect at our Badami Unit on the North Slope are both potential "company changers."

Alaska Business: How have legislative decisions regarding oil and gas credits and state tax policy affected your plans for 2018 and beyond in Cook Inlet?

Giesler: It's a pretty direct, slowing impact. Simply-put, the seemingly endless-loop of legislative decisions and discussion on oil and gas tax policy creates uncertainty.

The lack of stability and visibility in oil and gas fiscal policy has made attracting capital challenging, even for quite promising risk/reward drilling investments.

The seven oil and gas fiscal policy changes in twelve years have not been lost on our equity owners. They're slower to provide equity drilling dollars than they would be in a more stable policy environment. Particularly with Brent [a sweet light crude oil trading classification] now past $55. It was disappointing to have to delay Sabre from last spring to next summer. We're concerned that other projects attractive from both a production--and financial-standpoint--could get delayed, too.

The policy gyrations have also not been lost on our banks. Many of the banks we've talked to about a revolving credit facility literally end the conversation when we mention that our assets are in Alaska. The state's oil and gas sector has relatively few operators. The current fiscal policy uncertainty compounds the difficulty banks have committing human and financial resources to a relatively small addressable market for lending services. Also, some banks have been burned by making loans against earned cashable tax credits that have not been paid.

And, of course, there's the knock-on, indirect impacts of the fiscal uncertainty: greater uncertainty means less capital, which means less investment, which means less production, smaller royalty checks to the state...