Black gold: the goal of every Alaska exploration company: developers are searching cook inlet, the north slope and other areas for new developments, and some are succeeding.

• Author: Bradner, Mike

There are new players in Alaska's oil patch and hopes are that these aggressive new explorers can find enough new oil to stem the decline in Alaska oil production.

The new companies are in all shapes and sizes. At one end of the spectrum are true, old-fashioned wildcatters-individual investors working with small teams of professionals who usually own a piece of the action themselves.

Winstar Petroleum and its affiliate company, UltraStar, are now exploring on the North Slope, and Prodigy Oil and Gas Alaska, working in Cook Inlet, fit this category.

Armstrong Oil and Gas, based in Denver, is a few steps out of the wildcatter class, but is still small, quick to move and entrepreneurial. Armstrong is active on the North Slope.

At the other end of the spectrum are the large major independent companies, independent only in the sense that, unlike the large major oil companies, they are "upstream" oil and gas exploration and production companies. They are not integrated downstream with their own "downstream" refining and marketing outlets.

Anadarko Petroleum Corp., Encana Oil and Gas Inc., Forest Oil Corp. and Pioneer Natural Resources Corp. are four of these major independents active in Alaska. Each are companies of significant size and financial resources.

Anadarko, Encana and Pioneer are active on the Slope, while Forest's projects are in Cook Inlet and Southcentral Alaska.

One large major company is one of Alaska's new explorers, TOTAL, the Paris-based multinational. TOTAL is the fifth-largest private oil and gas company in the world, and plans its first exploration well in Alaska this winter, in the National Petroleum Reserve-Alaska on the North Slope.

The new explorers include some medium-sized and small companies that are focused on producing and finding new oil and gas reserves in already-producing fields, like XTO Energy, and smaller companies engaged in developing resources that were discovered years ago but not developed. Aurora Gas and Northstar Energy, working in Southcentral Alaska, fit this category.

There are others, of course. Andex Resources, a small Denver-based independent, is exploring for natural gas in the Nenana Basin west of Fairbanks. Clearflame Resources, another small independent, also headquartered in Denver, is exploring in the Susitna River valley north of Anchorage.

THE MAINSTAYS

This isn't to say, of course, that the long-established major companies who have dominated Alaska's industry for many years aren't also working to develop new resources.

BP Exploration (Alaska) Inc., the state's largest operating company, is aggressively working on development of small satellite deposits near the big fields on the Slope-as well as viscous, or heavy oil. So is ConocoPhillips Alaska Inc., which took over ARCO Alaska's properties in the state. Unlike BP, ConocoPhillips also is continuing to drill true exploration wells.

Exxon Mobil Corp., which owns a major part of the producing fields on the Slope, is working hard to develop a major gas condensate project at Point Thomson, east of the existing oil fields on the Slope.

MORE OIL PLEASE

If the industry is to find enough new oil to replace the declining production in Alaska's existing large oil fields, however, the challenge is daunting.

In the last 13 years, Alaska oil production has dropped by half, from a peak of just more than 2 million barrels per day in 1989 to about 1 million barrels today.

The existing oil fields are declining at about 5 percent per year. The decline of the core producing areas of the large fields is actually higher-Prudhoe Bay is about 8 percent. It is the success of the major companies in developing small satellite pools that is slowing the rate of decline.

The state of Alaska's official oil production forecast assumes there will be continued new discoveries of small-to-medium-sized fields to replace the oil produced from the larger fields that are declining.

Mark Myers, director of the state Division of Oil and Gas, hopes that there is enough exploration effort to make those discoveries. With the attention of the existing major producer companies, mainly focused on new, emerging oil-producing regions like Russia, Alaska must now depend on the independents, the new explorers to fill the exploration gap, Myers says.

The independent explorers are doing a good job, but Myers worries that there may not be enough of them. Alaska must work to attract more of these companies, he says.

A MIXED BAG

It is not surprising that the new exploration efforts by the independents result in a mix of successes and disappointments. One possible success could be Pioneer Natural Resources' discovery of oil in test wells drilled last winter. Pioneer, with Armstrong Oil and Gas as a minority partner, drilled three wells in shallow waters offshore of the northern coast and found oil in deep Jurassic-age rocks.

The oil was deeper and in different rocks from where Pioneer and Armstrong had expected it, but it still might be a commercial discovery. The companies are still analyzing the drilling results.

Armstrong, meanwhile, has found another prospect west of where it and Pioneer drilled last winter and plans more drilling this winter, either by itself or with a partner.

The Armstrong-Pioneer venture...