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Caelus Energy Alaska: Arctic Oil Find Could Be One of State's Biggest

Image: Caelus Energy Alaska: Arctic Oil Find Could Be One of State's Biggest

A Caelus Energy Alaska oil discovery could be one of the largest in the state of Alaska. (Gary Whitton/Dreamstime.com)

By    |   Thursday, 06 Oct 2016 04:48 AM

Caelus Energy Alaska announced Tuesday that its oil discovery in the Arctic some 50 miles southeast of Barrow could be one of the largest crude finds in the history of the state.

The company, whose headquarters are in Dallas, said its discovery at two wells on its Smith Bay site could provide some 200,000 barrels per day, the Alaska Dispatch News reported. The discovery by Caelus, which has yet to be confirmed by a third-party verification, would top the production peak by ConocoPhillips Alpine unit of 139,000 barrels a day in 2007.

"This discovery could be really exciting for the State of Alaska," Caelus Chief Executive Officer Jim Musselman said in a statement released by the company. "It has the size and scale to play a meaningful role in sustaining the Alaskan oil business over the next three or four decades.

"Fiscal stability going forward is critical for a project of this magnitude. Without the state tax credit programs, none of this would've happened, and I'm not sure Caelus would've come to explore in Alaska. We're proof that the credit programs work."

The company said the Smith Bay site would increase the Trans-Alaska Pipeline System of highly mobile oil throughput volumes and reduce the average viscosity of oil in the pipeline.

David Houseknecht, the project chief for the U.S. Geological Survey's Energy Resources Program for Alaska, told the Alaska Dispatch News that Caelus' discovery was made in the little-explored rock formation with potential to support large oil deposits, but stressed caution.

"I would not want to get too bullish right now," Houseknecht said, according to the Dispatch News. "I'd say we will know more when Caelus actually does well-testing."

Caelus stated it is planning on drilling an appraisal well to confirm reservoir continuity and optimize future drilling locations.

"When you’re exploring in the middle of nowhere as we are it's important for you to get an understanding of how oil in place is there," Musselman told the Alaska Journal of Commerce. "That's first and foremost and then you start working backwards from that."

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Caelus Energy Alaska announced Tuesday that its oil discovery in the Arctic some 50 miles southeast of Barrow could be one of the largest crude finds in the history of the state.
caelus energy, alaska, arctic, oil
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2016-48-06
Thursday, 06 Oct 2016 04:48 AM
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