also factors aside from oil prices at play.
Brooks Range must have Mustang producing in mid-2016 to qualify for certain state tax incentives that are worth
a lot to the company. Caelus, for its part,
is committed to develop Nuna under an
agreement with the state for a temporary reduction of state royalty.
Repsol’s exploration is proceeding
without artificial deadlines from the
state; however, the company is benefiting from state tax credits and other incentives just like the small explorers.
The state’s chief petroleum economist,
John Tichotsky, says Repsol’s commitment is important because it shows
companies are willing to take a long-term view. “They’re willing to ride with
the crude oil price cycle,” Tichotsky says.
Great Bear, in its exploration, hopes
to develop a new paradigm for the
North Slope, a shale oil play similar to
that in Texas’ Eagleford and North Dakota’s Bakken regions in the Lower 48.
An extensive testing program is
needed; meanwhile the company hopes
to tap conventional oil prospects on its
leases, such as those being tested this
winter, to help pay for long-term shale
The state’s incentive program is critically important to Great Bear, with the
state picking up about 75 percent of the
company’s exploration costs through a
combination of several state investment
tax credit schemes.
“We would not be drilling these wells
without the tax credits. Our entire financing structure is built on these. They
are available and the state is reliable,” in
paying them, Galvin says. “This is taking a huge part of the risk off of us, and
Courtesy van service - Fitness center - Housekeeping - Laundry facilities
Reservations 800.528.4916 | FountainheadHotels.com
STAY LONGER - SAVE MORE!
Best Rates in Fairbanks for the Corporate Traveler.
“We would not be drilling
these wells without the tax
credits. Our entire financing
structure is built on these.
They are available and the
state is reliable. This is taking
a huge part of the risk off of
us, and it allows us to bring in
more capital,” for exploration,
Vice President, Great Bear Petroleum