Oil and gas newcomers hopeful: Alaska's rich potential is main attraction.

• Author: Liles, Patricia
• Position: OIL & GAS

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Whatever access, taxation or regulatory action Alaska's State government has implemented or considered for the future to encourage oil and gas activity, the fact remains that investment in the state's natural resources will come only if there is potential for a return on that effort.

Fortunately, for those seeking continued development in the state's oil and gas industry, Alaska is richly endowed with natural resource potential. That characteristic is helping to attract new players to Alaska's oil and gas industry, which is more than 50 years old.

BROOKS RANGE PETROLEUM Co,

"It's the upside, of course, that is what draws investors to spend money on exploration, the anticipation of finding resources that will not only return your investment, but add to it," said Jim Winegarner, vice president of lands and external relations at Brooks Range Petroleum Co., one of the new players on Alaska's North Slope.

Brooks Range, a wholly owned subsidiary of Alaska Venture Capital Group, is the operator in the North Shore development project, located near the coast of the Beaufort Sea just north of the Prudhoe Bay unit.

North Shore is a small oil accumulation on the North Slope, expected to produce between 5 million to 10 million barrels of oil once Brooks Range completes development and begins production, expected in late 2012.

Initial development plans call for trucking crude oil nine miles one way to the Kuparuk pipeline. "With additional exploration opportunities out there, if we're successful, we hope to find additional resources that would justify a pipeline and bigger facilities," Winegarner said.

That potential for upside helps attract new explorers to Alaska, who are currently working on the North Slope and in other regions in the state that are also underexplored.

In past years, the major oil companies already producing on the North Slope have targeted large oil accumulations, leaving smaller targets that are now the focus of some new players to Alaska.

SAVANT ALASKA LLC

"We think for the most part, a lot of the prospects that are readily drillable are not large enough for the majors to chase, but for us, they are intriguing," said Greg Vigil, executive vice president at Savant Alaska LLC.

Savant, a subsidiary of Denver-based Savant Resources, came to Alaska in 2006, first acquiring some leases on the North Slope through a lease sale. In the spring of 2008, Savant drilled its first North Slope exploration well at Kupcake 1...