North slope activity sees increased investment: spending continues to rise despite low oil prices.

• Author: Bradner, Mike
• Position: SPECIAL SECTION: Oil & Gas

Crude oil prices are less than half of what they were eight months ago, but so far companies in Alaska are bucking the national trend of shelving rigs and laying off workers and are pushing ahead with field development projects on the North Slope, along with exploration.

There are projects in construction by the major slope producers, including ExxonMobil Corporation's Point Thomson liquid condensate project east of Prudhoe Bay and ConocoPhillips' CD-5 oil project, near the Alpine field to the west. ConocoPhillips is also proceeding with Drill Site 2S and the 1-H NEWS (Northwest West Sak) project, both oil projects in the Kuparuk River field.

Point Thomson will begin production in 2016, producing and shipping ten thousand barrels per day of liquid condensates to the Trans Alaska Pipeline System at Prudhoe Bay. "First oil" at CD-5 is expected in December 2015, with production estimated to peak at sixteen thousand barrels per day. Drill Site 2S has an estimated peak production of eight thousand barrels per day. 1-H NEWS is expected to produce nine thousand barrels per day.

Other Projects

In other projects, Brooks Range Petroleum is now drilling development wells on its small Mustang project west of the Kuparuk River field and is expected begin fabrication of production facilities later this spring. The company expects to have first production--eight thousand to ten thousand barrels per day--by mid-2016 and with output increasing to twelve thousand barrels per day in 2017, according to Brooks Range's Chief Operating Officer Bart Armfield.

Another independent, Dallas-based Caelus Energy, has begun work on its $1.5 billion Nuna project, also west of the Kuparuk field. Caelus expects to have fifteen thousand to twenty thousand barrels per day in 2017, according to its spokesman Casey Sullivan.

A gravel access road and a twenty-two-acre gravel production pad are being completed this spring, Sullivan says. Production facilities would be installed in the next two winter seasons, in time for the startup by the end of September 2017.

Nuna is an onshore oil deposit near the offshore Oooguruk field also owned and operated by Caelus. Caelus received a temporary reduction of state royalty on Nuna, but as part of the deal the company agreed to put the project into development despite the current state of oil prices and markets.

The company said it has signed authorizations for $480 million in expenditures to date and is preparing to spend an additional...