House resources committee will now come to order. It is now 1 of 2 p.m. Wednesday, January 28, 2026, in Capital Room 124.
Members present are Representative Colom, Representative Hall, Representatives Mears,
Representative Prox, Rep. Elam, Co-Chair Representative Dibert, and myself Co Chair Representative Freer.
Let the record reflect that we have a quorum to conduct business.
Please take this time to silence your cell phones for the duration of the meeting. Thank you.
Before we begin, I'd like to thank Cheryl Cole, the house resources secretary for records,
and Jude Augustine from the Juneau LIO for staffing the committee today.
Today we are hearing updates from Santos, Conoco Phillips, Alaska, Hill Corp Alaska
on their operations in Alaska over the past year. We have 40 minutes allotted for each
presentation this morning, including this minute, so we'll get started right away.
First up on the agenda, we have Santos.
In the room we are joined by Pete La Liberté,
Vice President for Business Development,
and Joe Belash, Senior Vice-President for External Affairs.
Please join us at the table,
put yourself on record, and begin your presentation.
Thank you, Madam Chair, for the record.
My name is Joe belash.
Senior vice president for external affairs at Santos
For the record, my name is Pete Lulliberté, Vice President of Business Development for Santos.
So
we're gonna walk through
what has taken place here over the last year with regard to the PICA project, an exciting development on state lands,
and talk a little bit about what it is PICKA is going to contribute to this state as well as some of the growth opportunities.
I'd like to start by acknowledging that here in Juneau, we're on the land of the ancestral
and traditional homeland of Akwan on Lekit Oni.
We also acknowledge their tribal governments and the roles that they play in taking care
of these lands.
And then the Pika Project is located on The traditional homeland of The Kukpikmute, Anupiat.
and the Inupia communities of the Arctic Slope, we pay our respects to their history,
experiences, and continued contributions in taking care of those lands.
This is the disclaimer where I tell you not to make a financial decision with regard to your
retirement portfolio based on what I'm going to present here. You might want to consider taking
As far as Santos goes, we are headquartered in Adelaide, Australia.
If you enjoy wine, then you have probably had some wine from Australia,
which comes from typically the Barosa Valley, which is very near to our offices there in Adelade.
It is one of Australia's largest domestic suppliers of natural gas.
We also export LNG in the Pacific market. We're a significant player in that market
Santos acquired the business unit assets here in Alaska at the end of 2021,
company previously referred to as oil search. And globally, we have about 4,000 employees.
Here in Alasko,
we had a 51-49 relationship with
Repzol, a Spanish company, on our core assets.
We have strong relationships with local stakeholders, in particular Kukpik, whom we enjoy a land
use agreement with.
And our workforce on a permanent basis is close to 400.
And we have our offices located in downtown Anchorage.
It is a giant oil field, meaning it has more than 500 million barrels.
It was confirmed in 2017, the permitting process resulted in a record of decision
from the U.S. Army Corps of Engineers in 2019.
As designed and through other policies adopted by our company,
project for Santos will be net zero in terms of scope one and two emissions.
We have worked really, really hard to minimize our emissions and those emissions that remain
we will offset through nature-based agreements with some leading ANC's from around the state.
Our core acreage position is on state land and we'll show that through some of our maps
With regard to getting an Australian company to do business in Alaska
The key thing there has been to hire Alaskans.
It's something that we have made a point of in our overall recruitment efforts.
And since opening as oil search and continuing on as Santos,
80% of the permanent employees that have were hired from within Alaska.
So that is something we think is beneficial, but also necessary to succeed in the Arctic.
We have a tremendous amount of global experience from our leadership team as well as our rank
and file, and combined here in Alaska, we have 3,700 years of experience amongst that team.
So.
Thank you for including this information in the slide.
This is a question that we asked last year about the number of Alaska hire.
And with that, I'll turn it over to my colleague, Pete.
For the record, my name is Pete LaLibertte,
Vice President of Business Development for Santos.
So I guess I am one of those people
that were hired here in Alaska.
I've been with the project since it kind of started
in the predecessor company with oil search.
I have been involved in this project
since 2018 and really proud to kind
of come to you today and represent where we are.
quite a long way in those years, and we're at the final stages of the start of what we hope to be a very long period of production for the state.
The pick-up project that we're talking about today, our Phase I project,
is going to produce about 80,000 barrels a day of oil.
So for reference, you know, taps kind of flows about 450, 000 barrels
a days right now, so it'll be a material amount of
oil that goes into taps from this project.
I guess before I kind get into some of the aspects of
the project itself, I really want to bring your attention
because as we've done everything in Alaska as an operator
in Alaskan and as one from a company that highly values
our safety performance.
If you note on there, there's actually kind of a nice thing,
a part of this picture of these red,
if you can kind see up, I don't know if I can,
if can see kind in there.
You'll see that there are these Red
zones in the picture, these lit up areas.
And those are actually loaders.
We use lasers to create an exclusion zone
around those loader.
And that's something that we've adapted recently.
This is our drilling site.
So we call it NDB, Naneship Drill Site B.
And it's our drill site to minimize the impact
that you have on the land.
We try to make that.
as compact a pad as possible so that we're putting as little gravel down as is needed.
And that's another way that can kind of ensure safety in that area is by ensuring that
we have very clear areas where people can see where they're not supposed to be.
And so as loaders move around, those exclusion zones kind
to workers in the area that they need to stay out.
Just again, it's one feature or one improvement
that we've made to try to continue
to improve our safety performance.
So the project itself, we're kind of,
Shelley?
Do you, can you continue, or, representative you?
Thank you.
No, I was just, the 80,000 barrels.
Seems like a significant amount and I was just wondering if you could maybe elaborate on what kind of economic impacts that might have in our communities a
Joe will definitely get to that
Sorry
Representative even through the chair Joe. We'll definitely to get that later on in the presentation. That's okay. Yeah, no problem. Thank you
So, what we are developing is in this first phase of the project is roughly 400 million
barrels of oil.
And when I say in the first phases of project, you also see there is about 500 million barrels
of what's called 2C or contingent resource, which is really additional oil that can be
developed in future.
So as we talk about the growth of PICA, we're really focused on that.
20 million barrels roughly of oil also get produced.
And so we're really just starting with the project itself.
We've already were close to completing
about a $3 billion investment.
We're 120 miles of pipeline, so we were able to construct that in two seasons, which allowed
us to bring forward our first oil date from what we originally expected was June of this
year to now what were expecting is the end of one queue this year.
So by March we expect to have first-oil.
We've got 25 wells drilled now and completed,
and we're in this stage now at 98%,
where we are basically moving this summer,
we kind of moved all of the equipment to the slope,
and now we in the stage of, it's all been kind
of hooked up, and then we were in
the stages of starting it up.
So we really going into commissioning work
at this Stage, which is really in preparation
for having the oil flowing as soon as possible.
Thank you. I just want to let the record reflect that we were joined by Representative Fields at 1-12 p.m.
As far as our core acreage Joe Joe mentioned it before you know we we look at that middle acreidge on this chart as
Our our really our Core area. So that's the the pick a unit which was is being developed first
we also have the quaka unit and the horseshoe unit, and
What we're looking at here, what we look at
here as far as the future in Alaska is really having
Hopefully, three pickers in that area.
So both Quaka and Horseshoe have that kind of same
scale of potential resource as the pick a unit.
And so we're really looking forward
to kind a deep contribution to the state and the future.
We also have an acreage position where we are 25%
out in the east with APA corporation, which used to be
Armstrong, Will and Gas, we have a position out there, and there was a discovery out
there last winter called the Sakai Too Well.
And then, of course, We have position further to the west in the NPR area, which is kind
of like a longer running room.
But the point of this whole slide is to say that we basically have projects now in all
various stages of development.
And we're bringing through these other units as well.
One example of that is that in Quaka right now, we have drilling operations going on for
an appraisal well in quaka that will basically delineate a potential project there.
So we continue as we go through the phases of pick a growth, and then we going to the other
units, where we are continuing to try to bring through
the state's resources and develop those resources on the acreage.
As far as the PICCA project itself, just as a reminder,
so you saw the picture of NDB before,
that's the Nanoshook drill site.
That's where we're gonna drill all the wells and produce.
And that is about, as you can kinda see on the map,
it's in the center of the unit.
We have a production facility that separate from the Unit
that will take all of oil in.
And in scope of project,
as we grow, we'll bring more oil from other parts
processing facility and then we have our operations pad which is separate from
all the production facilities and that's basically where
our people, our camps are, and where we operate out of,
we have our control room there as well.
And then finally, we do tie in,
and we'll get into this a little bit more later,
but we did tie into the Kapoorik Transportation Company
pipeline, which is basically the connector pipeline
that then gets us into TAPs.
And that's at our tie-in pad,
which you can see is number four there on the map.
up at Liktok Point, which treats the seawater so that we can put it back in the ground.
So for all the oil that you take out of the
ground, we want to put something back
in to maintain the reservoir pressure and we get that water actually up on that point,
on a Licktock Point.
And we're treating it to be able to, you know, be at the quality.
We need to
put back
in
the
reservoir to make sure that
As far as where we are with that, you know, we've progressed a long way, so we started
the project, started really construction on the
project with what we, with our final investment decision in August 2022.
We started development drilling, and so these are wells where not like the expiration in
appraisal wells, where sometimes we drill that well just to get information and then
the land completely alone, we plug the well and leave it alone.
These are the wells that are going to be producing.
We started that in June of 2023.
We then were able to complete our first pipeline season
and start getting our.
operations basically in place in our equipment fabricated and then in February
2025 we started up our grind in a JEC facility and that takes all the cuttings
from the wells and is where we basically put the cuddings down. And then we
completed our second pipeline season I mentioned that before accelerating that
got our equipment, both our modules and our seawater treatment plant in this summer,
and we're now at a place where 24 of our wells have been drilled,
so that's about 50% of the overall wells that we'll use for phase one.
So that where they are now, you can kind of see those facilities are all in place.
The picture on the bottom is the seawater treatment plant being basically parked in its new home
at a lictop point, and then the picture above is our now hooked together processing facility.
And as I said before, we're commissioning, and this is kind of what commission-ing looks
like.
It's getting plans ready, it's all the systems hooked up, all of the instrumentation and
safety systems operating and getting all our people basically ready to put hydrocarbons
into the system.
Give you a little more flavor, we got a video,
we love videos.
There you go.
Across Alaska's North Slope, the PICA project is transforming from vision to reality, powered
by teamwork, discipline, and the Santos commitment to being always safe.
Recently, The Sea Water Treatment Plant completed its 8,000-mile journey from Indonesia to
15,000 tons of precision engineering with the capacity to deliver 100, 000 barrels of treated
seawater each day. At the Nanoshook Processing Facility, the final modules are in place,
completing a two-year logistics effort and bringing the site to life as crews connect systems and
and the new operations camp now supports hundreds of workers living Santaos values.
Working as one team, pursuing exceptional results. From coastline to well pad, every milestone
brings pick up closer to first oil, and a new chapter of energy for Santaas and Alaska.
The other thing that we wanted to kind of mention to you today is it relates to how we're actually going to sell the crude that
we produce. We actually, because we are coming in without an infrastructure position like some of the legacy and incumbent
producers in the state, we actually have a lot of flexibility.
When we started looking at like, how are we going to sell our oil,
you know, we looked at selling on the North Slope,
we look at bringing it to Valdez and taking out with our own tankers and.
What we have is the ability to do both or all of that.
And that's because we don't have a physical position
in the pipelines, except for our own pick-up pipeline.
And we do not have physical positioning ships.
We didn't go ahead and construct our ships, so what we
have has a lot of flexibility in where we are going to
purpose of telling you that is that we think that it really gives us an advantage in being
able to try to capture the highest value market for the oil, which is really in all
of our interests, I think.
It's in the interest of the state as well as us to make sure that
we're maximizing the value of oil.
And so we're going to look at all of these opportunities throughout the life of the field.
One is, you know, if there are sales on the North Slope to incumbent producers that have
capacity, we were able to at that. We could sell at Valdez Marine Terminal.
One of things that we are trying to do, and one of
the things we've done commercially, is just ensure that
we have capacity at the Marine terminal. But that whole pipeline system, the TAPS pipeline
connection to it can use it, which is a real advantage for anybody coming into Alaska that
they have access to this infrastructure that has space in it to be able to move oil.
There are really two options as far as marketing it.
One is to the U.S. West Coast, which is kind of historically what's been done in Alaska.
And that's largely because of some of the policies that have been enacted in the past.
But some those have being relaxed.
And so what you're now seeing is that there is a growing interest in Asian markets for
Alaskan crude.
bigger market of buyers in a very flexible market in terms of tankers to try to be able
to both get a premium for Alaska's oil as well as minimizing the transportation costs.
So we just wanted to highlight this as a kind of a differentiator for us on the slope.
I think a lot of the success, you know, that we're seeing as well as other operators on
the slope for this, this nanoshook formation that
we talk about, is bringing other companies, other independent companies to the
slope too. I mean, there was just a lease round this year that the state held,
which I
think it was three times, it raised three
times the amount of proceeds as any sale since 2018. So you're
seeing new, new parties come in and, and like us,
that you have, being able to use the infrastructure that's here.
I'll hand over to Joe and...
So, Madam Chair, members of the committee, in my work history, I've served previously
at the Department of Natural Resources, and an important...
element of what we're showing you here is this this method of achieving value for
the state and you know for many decades the department has been focused on
understanding the value of the State's oil where the incumbent leaseholders tap
selling themselves oil at each stage and through each piece of infrastructure until it reaches the U.S. West Coast market.
That West coast market has some transparency, posted prices, but working your way back from that market price to the nor slope is really important because the fundamental bargain in the lease is when the oil is produced and it leaves the
that's when the royalty event happens, and so all of those transportation costs get deducted,
be it the pipeline tariffs or the tanker transport. And because we don't own those things,
the method of valuing our oil for royalty calculation purposes will be much easier.
a lot of money. And so, you know, the best of marriages,
you have some tough conversations.
And that is something that we think will allow DNR
to focus some of its expertise elsewhere,
more on the rocks and more in the permitting and less on
examining how much it truly costs us to charter a tanker
because it's not our own tanker company.
Pete mentioned our core acreage on state land here and the potential we believe that both Quaka
and Horseshoe are of a size of magnitude, a scale that is very similar to Pika. But today we don't
have the ability to say that with market confidence, we need to do some more drilling and have third
engineers certify those numbers. So at Quaka, we do have a discovery that was made in 2020,
and so we can demonstrate about 450 million barrels there. And we are currently drilling
on January 3rd and hope to learn from that well enough information to proceed with the next stages
of development in that unit. And then the horseshoe unit also was discovered in 2020 drilling campaign
and there the numbers are a little bit lower but we are very excited about that prospect and
our commitment under the unit agreement is to drill another well in the horseshoe area next winter,
so the winter of 26-27.
In order to achieve anything that looks at all like that series of blue and gray wedges in terms of a production profile,
that's all going to require continued investment.
In some cases, very significant investment, it's going to require permitting authorizations
and the continued alignment between our company and our partners at REPSAL.
So for PICA, we've developed the drill site B and you can see in FY26 some initial production.
Number, ultimately, is going to be a function of how quickly we're able to ramp up, but
by the end of the fiscal 26 calendar and rolling into July, we expect to able ramp
up to our full nameplate capacity of 80,000 barrels per day.
So what you see is a nice little plateau there for a few years before we start to see some
decline in the production from NDB.
If you advanced the slide we do have two other drill sites that are currently permitted
and
We'll require additional investment. We think initially we're going to be able to
eke out some additional
processing capacity at NPF, once we learn how that system works and
de-bottle neck it a little bit. But ultimately, we would like to expand that
facility up to 120,000 barrels per day. So, what does that mean in terms of
money? Well, for the last several years,
we've been paying taxes. We pay property tax every year,
in the calendar year, the tax year that we are in now, we've recently filed our assessment work
with the Department of Revenue, and we're going to pay more than $60 million in state property
tax before we produced. And you look at the years prior, it's been a significant contribution that
We expect we'll have the full 80,000 barrels per day of production, and we've utilized the price forecast from the state's full forecast.
And so that's a $62 barrel figure.
And we made some assumptions, of course.
We think our numbers and the department's numbers are pretty close, not exactly the same.
amount of revenue that builds up over time here and and by the time we get to
the end of that plateau in 2032 we're going to be approaching five hundred
million dollars of contributions to the treasury so that is that's pretty
exciting and that it is I'm sorry we we needed to hit that
expansion. So, if you add the growth that we're expecting, it would hit the $500 million
in 2032.
We have about ten more minutes for, but I will put you in the queue and then when they complete,
I'll slide this in a number.
Oh, yeah.
if we looked then at the impact on Alaska businesses and individual Alaskans, one of the easiest
ways to understand that impact is to look at where we're spending our dollars, how we are spending
our dollar. So, in the calendar 2022, after we took final investment decision, we mostly went
out and bought stuff. And a lot of that stuff wasn't here in Alaska. It was things like steel.
pipeline material. And so what you see in this wheel is that most of the spending that we did in 22
was non-Alaskan spending. But as we've progressed through time, that number has increased.
And we track our spending between Alaska vendors and nonalaska vendors, and then specifically
vendors. So progressing through, we got into 2023, began some of the work of
installing pipelines, and you can see that those Alaska spend numbers increased
significantly. One of key spending items there, it's fine to keep progressing
There's a partnership that has been formed with Cookbick in particular that is a very
large component of our overall project spend and so every year we're drilling more wells.
and has continued on to this day, but you can see the numbers go ahead and complete the slide.
We've now spent 81% of that $3 billion with Alaska businesses. So something that
we're very proud of, we look very hard for Alaska content first, Alaska employers and suppliers.
And this is kind of the wrap-up slide.
We could not possibly put all of
the logos of all the contractors that have been
involved in the project.
But this a relative snapshot of
the companies that we work with.
There is no way that Santos could do what's being done at Pika.
It is only through the expertise and know-how of these Alaska businesses that we've been
able to succeed in bringing this resource forward for the people of Alaska.
I've got Representative Mears, Representative Prox, the Representative Fields.
Thank you very much through the chair.
I appreciate that Santos was able to keep up with logistics
to take advantage of longer construction seasons
and you were anticipating to be able
to get online earlier.
That's a tremendous advantage
to have the weather working with you,
because as we know, that's not always the case
here in Alaska.
I'll pick up on the point, I think,
Representative Ealing was picking up
on and Representative Seiler
usually picks up is there's some.
X and Y axes without labels.
So there's scale, but not quantities in there.
But I did want to ask a specific question
on slide 17 with the state revenue forecast.
Does this represent net income to the State
and account for her barrel tax credits
or is that a gross amount?
So this is an all in figure that includes property tax,
corporate income tax.
production tax and royalty. And by far, the largest single
component of that is royalty
does it back out production
tax credits.
I think I
think the way to answer that question is our production
tax that we pay is a function of
Realizing the benefit of some carry forward losses, right? We've we have spent
Three billion dollars. We're not able to deduct that against production tax value today because we don't have any production
So as we go forward we will have a balance of those
Carried forward loses that
that have accrued and and we will eventually work those off and how quickly we work them off as a
function of the price of oil and the rate of production. Just a clarification so this is
not not gross. I mean gross not net. This reflects the production tax that we
Thank you, Representative Prox.
Yes, thank you. I was
Thinking that this project has from discovery to run online has been relatively quick
Could you compare to other historical projects?
Through the chair representative Proxx 13 years, you know, that's that a teenager, man
And so, you think about the discovery of Prudhoe Bay in 68 and first oil down taps,
that was faster.
It is no easy feat to bring a project into production here today, given the amount of
that's required. You have to also consider that we experienced a global pandemic, at least
one price crash, I guess two, if you really look at the calendar. But, you know, it's been
a haul. Okay, so that it isn't necessarily quicker. It's just maybe I haven't heard about it.
Thank you, Representative Prox.
Representative, just time check.
One of respect the time of our other presenters, it's 137.
We've got three minutes.
If there are further questions, if committee members will send.
I mean, I'll get to, but if there
are other questions beyond what we're
able to get too within three minute.
Please send them to house resources, we'll get the answers and we will try to distribute
those out to everybody.
So, Representative Fields.
Well, I can easily take all three minutes through the chair.
I mainly just wanted to thank Santas for being very intentional about maximizing Alaska
hire and local benefits on the slope with ANCs, with village corporations, and in downtown
Anchorage with your headquarters.
So it does make a difference, then I think when you ...
look at resource states that are not wealthy anymore versus those that
are, namely us, local hire,
realizing those economic multiplier effects
is the difference in addition, of course, to having a sovereign wealth fund.
So just really appreciate it and it was
for people who haven't followed it, it's really hard because
our contractors, our local contractors were rebuilding capacity to build pipeline,
So it was a particularly difficult environment, and I just, yeah, it took a lot of work.
I'm sure the profit margins were lower, but Alaskans benefited from that, so thank you.
Thank you, Representative Fields, let the record reflect that we were joined by Representative
Sather at 1.30 a.m. Co-chair Dibert. Thank
you through the chair. I don't really have a question, just wanted to add on to rep feels,
Thank you for your commitment to Alaska hire,
Alaska companies, and also your
commitment, your commitments to safety of your workers.
That was a great slide.
And to your committment to net zero emissions.
Thank for all of you hard work up in the north.
Thank.
Thank You.
Well, with that, thank you Cleanup Book for joining us in house resources today and providing
us with an update.
We are going to take a brief at ease while we get our next presenters up here.
We are back on record in house resources next up
We have conical Phillips
Presenting today will be Barry Romburg vice president for commercial and midstream and Colin wolf vice President for finance
Please come to the you're already at the table. Please put yourself on-record and begin your presentation. Thank you
Good afternoon coach air freer and coach our divert distinguished members of the house resource committee. My name is Barry romborg
It's good to see you again
I've worked for ConocoPhillips for over 20 years.
I have been in the state for most of the last 27 years and I'm proud to call Alaska my home.
My co-presenter today is Colin Wolf.
He's actually born in Anchorage, a while back.
I recently moved back to the State and you'll hear from both of us today.
We're representing ConacoPhillip's together.
So, just a quick reminder, we are also a publicly traded company, anything I say today that
might be forward looking or anything in our presentation, please be advised, it would
not be good to trade stocks around that, and that's our disclaimer.
So before we begin our presentations about our North Slip Operations, I would like to
first address something that happened over the weekend, so I think everybody's probably
Very unfortunate. Last Friday afternoon, there was a serious incident that occurred on the North
Slope while Doyan 26 was transiting a gravel road. We were happy to report that no serious
injuries occurred and the environmental assessment at this point appears to be that the spill is
very well contained and an environmental impact will be minimal. On Friday when we received this
ConocoPhillips activated our emergency response team.
We dispatched fire teams from Alpine, from Willow,
and from Capark.
They quickly mobilized to assist Doyan with this incident,
and we also treated the eight injured individuals
in this incidents at our North Slope Medical Clinics.
Like I said, it was very unfortunate.
We stood up a team very quickly on Friday
to do the initial emergency responses,
as you would expect.
I was there at the Emergency Operations Center, and on Saturday working with Doan,
we mutually decided with the state of Alaska that we must appropriate for Doen
to take over the lead on the response, being the brig owner and operator,
and that'll happen on a Saturday afternoon. And we are supporting Doun at every step.
We've got several subject matter experts over in their command center today,
and we're doing our best to make sure we all succeed. This was a very sad day.
The Doyon 26 rig was a very special rig for us.
I think one of the questions you're probably asking as we were is,
what does this mean for our North Slope operations?
I'm pleased to say that within about 48 hours,
we pulled a team of about 25 people together,
and very quickly we're able to come up with an alternative.
So our exploration work plan for this winter
is gonna be on track, we've got a substitute rig,
and we are gonna move forward with that.
I don't expect, at this point,
Material change to our long-term production forecast and that's another question that is out there
And we will have to do some rearranging of our other projects, but nothing that will material impact our production
Last thing I want to say about this, I'm really proud of the team that came together this weekend. It was a very emotional incident
I think for a lot of us, and I've seen the videos, it was really something
But our employees and contractors, we pulled together, went above and beyond all weekend long,
caring for each other, ensuring each others safety. And it's one of the things that makes our
workforce very exceptional. So I'm very proud of a team, deeply grateful for their commitment
to each another and the environment. We continue to support going on in the state of Alaska,
the North Slippborough and ICAS and EPA. These are all the entities that are working under
Spill gets cleaned up, and things are taken care of up there.
Thank you so much.
So, at this point, I'd like to turn it over to my colleague, Colin.
We'll take us through some of our first part of this presentation.
Thanks, Barry. For the record, my name is Colin Wolf.
Thank for the opportunity to provide an update on conical Phillips activities on the North Slope today.
I've newly arrived back in Alaska,
and I'm looking forward to working with each of you going forward here.
Last year Barry and my predecessor provided an overview of conical Phillips as a company.
I had the opportunity to watch the proceedings from last year, and I hope it was informative as you learn more about our company
This year we decided to give a little bit more of an update on the projects and what we're doing up there.
As you can see, you'll see many maps probably today, but we kind of focus everybody on getting a bike grounded with a map.
So, I'll cover the map really quick, high level here, and then we can go into kind of
a history lesson I guess from Alaska's standpoint on the oil and gas industry.
So legend down below, we have some circles and we some triangles.
You have black triangle and a black circle and you can see what those represent.
Those are current projects and CPFs, they're central processing facilities.
And then you have blue triangles and blue circles.
conical Phillips acreage is in gray and then you can see some of the reservoirs
that were focused on here
Now you'll see some squiggly lines, you see a green one and you will see the black one,
the Black one being TAPS which is operated by Aliesca with shareholders of Exxon
Conical Philips and Hillcorp. Then you can see that green, the green is a series of pipelines.
Our colleagues, Santos mentioned that they were coming into KTC which
is the Caparic Transportation Company pipeline and that's the one in the middle
So then I was mentioning the history lesson here so my father was actually up here when I
was born working on taps and so hence that kind of ages me as to how old I am but you know as we
go from right to left or if we go east to west and that's kind how the North Slope was developed.
There's been a lot of stuff that happened in between but we start with Pudo Bay and our
We have Kapark, which we are majority owner of, and that was since 1981.
We've got Western North Slope,
which comes up next,
and then we have Willow,
which is sandwiched in between the MPRA,
as well as Western north slope and the other assets.
So, Barry will spend a little bit more time talking about Willow as we move forward here,
but it is what we consider a generational asset.
This only happens once in a generation, as if we look towards things that are going forward,
and so we'll spend some time talkin' about that.
I think one thing that I'm very proud of is being a part of.
A conical fill is for almost 20 years now.
And then being born here as well is that we've been committed to Alaska for 50 years.
In that 50 years, we have spent $50 billion,
which I think makes us the single largest private investor
in state history.
Now of that, during those 50-years,
we had paid $37 billion since 2007 to the state of Alaska.
So just to give you a bit of a magnitude
as to how conical Phillips has supported the State of Alaskan
and the people here.
The title for many of you is probably very obvious.
Operating in the Arctic is very complex, but we thought we'd spend a little bit of time talking about why that is.
So before we get an update on the project, I wanted to spend bit time on these complexities and what drives it.
So if you have not had the chance,
I'd recommend you come visit us on The North Slope.
A month ago, when it was negative 15 degrees, for those of me that were in Anchorage, it got to negative 70 below zero on
So you can imagine trying to do work, whether it's drilling,
whether there's workovers,
whether is normal operations,
and how difficult that can be.
So as we also look into things,
the North Slope is very far away.
It's hard from a logistical standpoint.
So not only is the weather challenging,
but the majority of the work that we do is during the winter time,
right, because we need to take advantage of
the ice road season.
And we get our goods and machinery across the ice roads to the different locations during this time of year.
And then when we think about getting the crew to market,
Santos talked about one of their points of sale being there,
but actually you need to get the crews to mark it,
and the market as they pointed out is the West Coast, and it's Asia.
So that takes a lot of logistics,
and we'll talk about that here in a second too.
When we look at our projects, the two largest variables that impact economics.
are price fluctuations and subsurface risk.
So as many of you know, prices are extremely difficult to predict
and conical philosophy relies on capital discipline,
asset and portfolio diversity, and a strong balance sheet to help mitigate
these fluctuations. We don't invest in every good project,
but projects are judged on our relative competitors,
I'm not sure if any of you had the chance, but our chief economist was actually up here
from Houston last week to talk about oil prices and kind of how things look going forward,
but it's usually very entertaining to view her presentations and kinda see her crystal
ball and things.
So in terms of the subsurface risk, we employ lots of smart geoscientists, engineers, and
other business professionals.
as well as cutting edge technology and our deep experience to help mitigate subsurface risk.
But it's hard and you often don't know much until you start drilling and producing from the well.
So as we go through these projects, what I think we've appreciated is that you have an initial view on things,
but if you move through the lifecycle of a lot of these reservoirs, things change.
And so we believe that experience is a very important part as
we look towards the future of Alaska and future project development.
you'll see state fiscal is your financial risk. We want to continue to partner with you all to
help mitigate this one. Given that these projects are a very long cycle, Alaska needs to maintain
a stable physical environment. As an example, the state of Texas hasn't changed its government
take on crude oil since 1951. The same tax rate for 74 years to continuing to encourage investment
produced 10 times the amount of crude
that is produced in Alaska last year.
So fiscal stability is critical to the decision process
when we look at long-term investment decisions
like in Alaskia.
We're committed to investing in the Alaska,
and now we're going to talk about a little bit our projects.
All right, so we are going
to break up the rest of the presentation
and kind of these five buckets here.
So the first one being core business stability.
These investments are needed to slow or prevent national decline of the field and help to stabilize production rates.
We also need to ensure that our major equipment stays in excellent condition so that we continue to deliver crude from Alaska to the markets.
The second bucket there is what we term as major projects and programs.
And this represents kind of the exciting projects that you end up seeing in the newspapers and everything else.
Pick up being one of those is our Francis Santos alluded to.
And these are the rate adding projects, so adding additional production flowing down through taps.
They can cost almost a billion dollars, and they require at least a few years to bring up to full production.
And since SB 21 was enacted, we have consistently spent about a million dollars per year in this category.
Next is generational investments and that should be pretty obvious as to what that means
But the great example of that is Willow and my colleague here Barry will spend some time talking about it
In terms of exploration, Barry gave you an update on the unfortunate accident with Doryon 26,
but given the great team that we have at Conical Phillips,
and especially people willing to work over the weekends to figure out plans,
we were able to mobilize another rig with little to no impact of our exploration program for 2026,
really a testament to our people.
We're involved in every single piece of the development life cycle,
soup to nuts, demonstrating our continued commitment to Alaska.
Now let's get a bit more into the detail in each category and we'll start with the core business
stability.
It's a core of business stability, as I kind of mentioned, this isn't necessarily the one that
gets in the newspapers every day, but it's core to the oil fuel business.
It came online in 2000, and we just hit the 25 year anniversary last year for it.
But it is no longer a young field, even though at 25 I still feel like a younger person
and then.
We had to change our operations strategy, they're to focus on reservoir development and overall
And sometimes our wells aren't producing at optimal levels or get shut in for various
reasons and we have to go back into those wells and fix something and refer to this
as a well workover.
So some of these rigs that we employ actually are used to bring back wells that have an
issue or have you just to make sure that they end up producing as much oil from these reservoirs
as we can and flow down taps to market going forward.
So again, our goal remains to economically produce as much oil as possible in these existing reservoirs and do it in a safe and prudent manner.
Alright, so now we get into the major projects and the ones that usually see press releases about or other items in the newspaper
just because they are additive investments to our base business.
We typically invest in this major project using a phased approach
which goes back to that capital discipline that I alluded to earlier.
These projects typically have a multi-year budget, but since we designed them to be phased,
it is easier to respond to changes in the macroeconomic climate, physical climate or respond
to subsurface learnings.
After 50 years in this state, we continue to see underlying growth potential in our existing
fields at Alpine and Coparac, and I'll talk a little bit about those as we have here up
on the slide.
and we achieved first oil from Nuna under budget and ahead of schedule in December of 2024.
It is the 49th drill site developed at Caparac and the first new drill
site develop in Caparrac area for nearly a decade. The drilling program at Nuno will add 28
development wells and with the 11 wells that are already complete we expect to continue to
So Nuna's neighbor is Coyote and it's a different reservoir and so we categorize it as a
different project. We began the drilling program there in 2025 to develop the
reservoir utilizing the existing infrastructure within Copark. The peak
oil we expect from that one is about 13,000 barrels per day once it comes online in
And we started the permitting process there and stakeholder engagement for a new pad called CD8.
This is currently premised to 25 wells and we are forecasting about 26,000 barrels a day in peak production.
And this development will add almost a decade to Western North Slope or Alpine's field life moving forward.
So a very important project for that asset.
The last one here is Wesak, which is actually very different from these other projects.
We've actually been developing Wesaks since the 1990s, so for an awful long time.
I think this is a great example of just how prolific and important these existing reservoirs are in Pudo and Comparac and Western North Slope.
We have seven near-term wells planned, but as you can see up there on the slide, we've already drilled 110 wells.
And again, this is a great example as we look at our assets and we continue to learn about
the reservoirs, just they continue provide opportunities to ensure that we produce as
much as the resources we can here moving forward.
So I hope that information was helpful and now I'm going to turn over to Barry to talk
about our generational investments starting with Willow.
Thank you.
So we've used this term a little bit today generational and I think representative practice
I thinking response to one of your questions, you know a project like willow has taken over 20 years
Actually close to 25 from initial expiration to where we're at today, and we are still several years away from first oil
So it can't take a very long time these investments are very a long lifecycle
Especially compared to some things in the lower 48 which are much closer to infrastructure
permitting is not as much of an issue and
It's just very different very, different business
So other generational projects that we've had on the North Slope are things like Alpon and
Kapark in the 1980s and then early 2000s
They're one those two came on and they're currently producing almost 30% of the flow down taps
And so it's taken a lot of investment and a lotta technology to get there
But we're been keeping these fields going and that's a really big part of our core business
But without projects like Willow and pick up of course
This the state oil business is very hard
to make it work. You have to have these big investments that are 20, 30-year payoffs to
have that so we don't decline, right? I think, you know, if I was here giving this presentation
10 years ago, we would have a very different story around the economics of the state. Scale
matters a lot. And that's one thing that has been remarkable. I know we've spent about 15 years
been really tough, it's taken a lot of investment, but we've stayed out of the danger zone and by
that I mean stayed of a throughput regime that would cause the economics to be very challenged.
So talk a little bit about Willow and to set that up, you know, I think one of
the things that is a fact about a project like Willow is it is
a greenfield investment meaning there was no infrastructure out there at all, no road access.
And so as we think about the challenges of working in Alaska,
Only having seasonal ice road access and having to move all of your equipment up either in a sea lift season
For a few months and then on trucks on the road can be quite a challenge
I'll talk a little bit about the the sea lifter in an a moment, but on
Just on The trucking side alone, which is the smallest part of the logistics
There'd be about 5,000 truckloads worth of material that make it way make its way up the Dalton and seasonal life roads over to Willow
And if you do the math on that on a per day basis, it's pretty outstanding.
And then on the seal-up side, we've already had 12 barges deliver the major modules
for part of the facilities in Willow. We have 20 more coming over the next couple years.
So this is a massive project and represents a major investment for a company like Conoco
Phillips. I don't know anywhere else in the world, I think I mentioned this last year.
My company, anyway, has invested this much money in a single project at 100% ownership,
and I think the fact that we're willing to do that really says a lot about our long-term commitment
to the state. So without generational investments like Willow and Pika, the economics of our
Alaska oil industry, our mutual interest, would be very challenged. I'm going to talk a little bit
later about transportation infrastructure, but that is something that's very unique about the
And that's something that makes the economics challenging.
So, last year when I was here, talked a lot about some details about the Willow Project.
I'm going to continue that conversation today and really focus more on what we've done over the past 12 months.
So this slide here kind of gives you some pictures and some diagrams of what is Willow.
upper left here and the BT-1 or the bare-tooth-one drill site. So construction is underway and
we are actively drilling out in that area right now. In the center is the Willow Operations Center
or as we refer to it, the WOC. All the 12 modules that were shipped and transported to the site
and now it serves as a home base for our construction crews and all the
activity that's going on there year-round now.
On the right is the central facility pad which will be completed in
2028. Fabrication of those modules and the Gulf Coast of the US are about 50
percent complete. They'll be traveling up during the 2027
seal of its window and will put in place in 20 28
This winter we'll have about 3,000 people working on well up there
So I want to talk now about another part of the business, it doesn't get a lot of air time
It's been a while since we've done any major exploration in Alaska as conical phillips
but this winter is a big year plan on drilling for exploration wells and
I'll talk a little bit about the exploration function of an oil company. So without it
None of this works, right?
And you start with seismic, and if you see a target,
and then you, if can condense your board,
you'll go out and drill what is on a subsurface side
a quite risky thing to be putting millions of dollars
into drilling activity when nobody has physically
found oil yet, you're going purely on data.
It is, it's a risky part of the business
from a financial standpoint.
but absolutely necessary, and furthering the point,
typically if you're near infrastructure you'll get first production
10 to 15 years after your first exploration, but for a project like Willow
where you are very remote and you building all your facilities, it can be more like 20.
So, already talked about our exploration program relative to Doyan
26, I want to finish by saying
Right now, the way we see the plan coming together, we're going to execute it exactly as planned.
And that's a really good thing for the state.
I wish I could say that it's going add barrels next year or in the next five years,
but it will really honestly be our children's future that we are really building out there at the MPRA.
These are investments we were making that are going pay off for years and years.
So next I want to talk about a little bit of our infrastructure.
company, a lasco oil company operating that is in every single piece of this value chain. So all
the way from the early exploration, all the ways down to transporting these these car goes down
to the west coast into Asia for sales. And we don't talk about it a lot, but it is so critical
to health of our alask oil industry to make sure that things like our pipelines and our tankers
We invested in these assets a long long time ago and we we
Invest money every year to keep them healthy and that's that it's critical to make sure that they'll be here as Aliezka says for the next 50 years
And we are approaching our 50 year anniversary here shortly
So if there's one thing we care about more than safely transparent porting our oil
It's our people and and We operate a fleet of airplanes to safely get
and reliably get our people out to places like Caparic and Alpine and Willow.
And that's just one of the unique things about operations here.
Of course, we use Lask Airlines to get a lot of people to dead horse as well.
But when you're operating out in the fringe, you do have to provide your own infrastructure.
It does add to the cost, but it's absolutely necessary to do those sorts of things to make
sure that we can do this for a very long time.
and we're not here to talk about oil taxes and so I won't get into that but I do want to say
it just a fact in every project that we've talked about in this room was thought about and
decisioned during the in the current fiscal system and you know there are no promises in
this world on that I understand that, but it does hit me that to the extent that what we were looking
It to the tune of billions and billions of dollars and if you compare that to
Say the timeframe between 2007 and 12
Radically different story and I think I showed you a graph last time where you know the state projection for oil production today
Would be about 300,000 barrels a day before SB 21 and now of course you've seen the DNR forecast upwards of 600, 000 barrels today
So I I thank you from our perspective. It's working
So I want to finish with a little, some commentary about not just our operations in our projects
like Nuna, Coyote, CD8, our exploration activity, and of course Willow.
We feel that what we do is important, but how we can do it is even more important.
So as you all know, we're very active in the community.
I've got some numbers here for you to back that up,
but I think you see our name in a lot of places.
and we think that reinvesting the community is critically important to demonstrating we're here
for the long haul. And also, you know, we do it for our people. Colin mentioned we have over 80%
Alaska hire. That's something we care deeply about. So some numbers around this. On average,
A very, very long list of recipients there, mention a few of them, Covenant House, the
Food Bank of Alaska, Alaska Excel, which we're helping them in their mission to provide educational
equality throughout the state.
And in total last year, we donated to 277 nonprofit organizations.
I'm very proud of that.
In addition to that, sometimes one time things come up, I think not that long ago, the Western
Alaska relief activities that were happening, we donated $75,000 through the Alaska Community
Foundation and the Red Cross to help respond, as many did, to the very unfortunate circumstance.
So being a responsible neighbor is very important to conical phillips
We're very proud of our community partnerships
I want to thank you again for this opportunity to come back and give you an overview up our of operations
And we appreciate the chance to share these updates with you that we're all of all our activities in Alaska
Wonderful, thank You. We've got about
Well minutes for questions. I've gotten
Representative sadder representative mirrors representative fields representative proxy
I'll keep her quick, keep removing.
Through the chair, either Barry or Colin, not sure,
but on slide eight major projects, by my count,
you got about 150 wells anticipated drilling,
mostly in Coparic.
What's the timeline of that?
Did there's constraints on exploration infrastructure?
How long is it gonna take you to do all that planned drilling?
Yeah, go ahead.
To the Chair, Representative Sadler,
this is Colin Wolfe for the record.
It's a great question.
As we mentioned, each of these major products,
Typically last a couple years in order to drill them some of the smaller ones can take a year, but usually we
Drill and then start first production depending on the phase development of it
I'd say about a few years for each of these depending upon the complexity and how big they are
The infill, that's not just the initial production that is through the life of the project.
Correct, yes.
And that helps understand the time.
And with that, West stock is a great example.
Having started that in the 1990s, we've been doing that for almost 30 years now.
So it's very dependent, but we're very deeply committed to ensuring that we get as much
resource out of these reservoirs as we can do.
Through the Chair, Representative Sellar, I'd like to add on to that if I could, you know,
I think there's the initial project, and then once you're there with the infrastructure
and the well slots, it can be 10 or 20 years of that gift to continue to give and to little
insight of how, we think about that.
One of my teams runs all the economics for all these things,
and what we do is we look at all of these opportunities,
and whichever ones will provide the most.
benefit to the state as well as ourselves, the ones that will maximize the amount of revenue
for the cost is what we go after. And we prioritize those and it can be, like Colin said, it
can 20 or 30 years of giving after the initial investment.
There's a great segue that I'm a brief follow-up. So it's Willow being overbuilt in anticipation
of more Western slow production in the future.
Yeah, Representative Sadler through the chair is calling off again.
That is a great example.
We actually think of Willow as a hub and spoke approach.
So the idea of building the infrastructure large enough for
Willow to support for their exploration and
our example is the exploration drilling that we're doing this year.
Theoretically, we would be able to tie that back to Willow.
Thank you representative Sadler. What am I here to?
Representative Mears. Uh, thank you. I through the chair.
I appreciate that you ended with community benefits local hire
Utilizing local contractors giving back something that we need to pay out
A little bit more attention to here in the building on a daily basis is the impact to the state budget.
So the Department of Revenue updated their projections for the income from will over its lifespan in
the last two years from $6.3 billion down to $2.6 billion.
That is significant.
I know that you're not the ones that did the financial analysis on that but what's the explanation
for that?
Have there been increased development costs or are there other factors?
through the chair representative mirrors price. So I mean if you take a look at the
the difference in the price assumption between previous years and this year it's almost entirely
a price item. I think we all know how SB 21 works when you are under a specific oil price you're
paying a net revenue tax. And so at this price in this Price range that is probably the biggest
you know, if you take our current cost and just inflate it over time, you can get one answer.
But the reality, and unfortunately, as you've seen in the last several months when prices are low,
we think really long and hard about the money we spend. And so you should expect with lower prices
that we're going to get even more and more efficient out of survival to make sure that
we can continue to do what we do here. So between those two things, I would say that it's
Let's say one is very hard to model these things over a long time. We have to make very broad assumptions
But those two things from what we see are the biggest differences from the previous analysis to the current analysis
Price and then cost assumptions
Thank you
Representative Fields
Thank You through the chair
Just wanted to acknowledge
As far as I've been able to observe high rates of Alaska higher to build pipeline going out to Willow
Thank you. It does take intentionality to achieve high rates of Alaska higher.
I also just want to note Conoco is headquartered downtown, or downtown employers, large employers.
Play a disproportionate role in the health of Anchorage.
And in addition to some of the community projects, you already mentioned,
I wanted to thank many Conaco employees who are extremely involved,
have been extremely involve for decades in a wide range of projects.
to investment in the Performing Arts Center, which is an institution that's foundational
to the economic health of downtown.
So thank you for that, for those contributions, both from a leadership level, but also many,
many individual employees.
Thank you.
Thank You.
Representative Fields.
Representative Prox.
Yes, thank you. Through the chair, Conoco's been here a while and been working with the
university. And I'm wondering, is the university supplying you with enough
Through the chair representing Fox. This is Colin Wolf for the record. So great question
You mentioned accounting so I had to jump in there as the VP of finance and answer your question there
I'd say it's challenging overall. I think that one of the things that we continue to do is support an internship program
As well as try and partner with the universities to give them opportunities to learn about the oil and gas industry as well
As specifics like accounting or engineering or what have you
So, it remains to be a focus because I think as we look as a company,
it is not only the lowest cost for us to get local employees
in terms of having to move people here and everything else,
but it's great for the state.
So we are heavily invested to try and or continue to support the universities
to ensure that our pipeline moving forward of people is robust.
Hello?
Follow?
Not to accuse anybody of anything, but is there room for improvement?
There's always room for improvement.
We're 80% local hire.
So I think there's at least 20% that we can improve on.
But I would also say too, as somebody who supported
university programs in the past and the places that I lived,
yes, it takes a lot of time and effort to do it well,
but it is something that
we need to continue to invest and continue
to work on as we look forward.
OK.
Wonderful.
Thank you.
Yeah, I'm going to put myself in the queue after President Clomka.
Okay, thank you, Chair, through the Chair.
So how long has it taken Conoco to get Willow to this stage?
When did this all start?
Through the chair, Representative Clome a long time ago.
So I think the earliest that I could remember activities out there were the late 1990s.
you know, the the lease for Willow was issued by the federal government in 1999, 30 years will
make that into might have been actually 2000 because the least expires right around 29,
30, and it's a 30 year lease. So I think that that is the long answer. But you
know it takes a long time to assess and prepare something like that for
development. And I will say in the case of Willow, the stars really had to align. I think last time
I was here, I talked about horizontal drilling and some of the technology that's advanced.
Without the advancements in that technology, that really were developed in lower 48,
there's no willow. There's there is no picker. Those techniques of
the drill rigs being able to go out miles and miles, and find thin layers of oil,
That's not something we were doing in the 90s or 2000s.
And so I think everything has a time and a place,
and we've arrived at aplace where this renaissance of
Alaska oil production is right in front of us,
and it's just taken the stars to align.
So very pleased to say the Stars are still aligned.
I just wanted to thank you for your persistence,
determination, and your commitment to the state,
and for me, Anchorage.
Particularly for the contributions you do to help our city better make make things better in our cities. So thank you. Thank you
Thank You. I just wanted to make a couple of comments as well
I've been able to I had the opportunity to visit Alpine
I saw Willow and Willow is just a pad and and you are just staging with the with a camp and so
My husband is a surveyor out of Alpine and so he would go out on a snow machine and tell
me what they were doing and what their looking at.
I might have a little...
I guess a little bit of a heads up and I just wanted to recognize both Conoco and Santos and
and and how you work so closely with the community of Nolxit and
and just your contributions on the North Slope. So, clean up book and then I think I've got
I got Representative Sadler how to follow up question.
and Representative Dibert and then we are we've got two minutes for until we're at time.
Thank you through the chair barrier column not sure we mentioned the long lead time to get
to will to production that's a federal lease 30-year lease. I know you hold a unit by production
can you Hold a Federal lease by Production or do you have to come up and renegotiate
through the chair representative Sadler. Of course, the answer is it depends. But there is,
by statute, a firm 30-year limit that cannot be extended. Now, are depending on the prospect
and depending upon the deal with the federal government, there can be continuing drilling
obligations at years 10 and in other milestones. So, they do follow a pattern. They do typically
But those milestones and those requirements are a bit different for each project.
So to clarify, I'm not quite sure seeing after 30 years if you're still activity, you can
hold it, but you have to renegotiate it after 40 years.
Through the chair, Representative Sandler, my understanding is that you must produce within
that 30 year or, yeah, then you will continue to leave the lease.
After yeah first production, and yeah it's a whole different story.
Yeah.
Thank you.
Thank you through the co-chair
Not sure if you could answer this in one minute, but today on the house floor
We had middle schoolers on on
the floor so I'm gonna ask can you expand more on how the importance of
Internships and apprenticeships are if there are any middle-schoolers out there watching
Yeah, no, thank you to the chair co chair delord. So I was a teacher for a year
And it is, please have us on the record,
it was the hardest job I've ever had.
And so I have a very huge heart for teachers,
as well as students.
I had two daughters, 10 and 13, one in middle school.
And she asked me what I was doing today,
and I told her I always said,
providing testimony to the legislature,
so she's watching right now.
But again, I think it, and it comes down to exposure,
it's probably my long-winded answer here,
and given them the exposure to our offices,
given that exposure our work,
given then exposure we actually take families
to their North Slope.
And so we were talking earlier, but we have a polar bear plunge in the summer time if anybody would like to come up to see that.
But I think it's exposure, right?
Kids want to se and feel in touch, and so, we want provide those opportunities in order for them to
see, feel and touch what the oil and gas industry is and what it means to Alaska.
Wonderful.
Thank you so much just looking at time and seeing no further questions.
If there are questions, again, send them to House Resources.
We'll get them out and distribute them
to committee members.
And with that, we'll take a brief at ease
while we move on to our final presentation.
We are back on record in-house resources, presenting for Hill Corp.
Alaska will be Luke Soge, Senior Vice President.
Thank you for joining us at the table.
Please put yourself on the record and begin your presentation.
Okay, co-chairs Freer and Diber, thank you
for the opportunity and the invitation to come and give you
an update on what Hill corp is doing on
the North Slope and in the Cook Inland.
For the record, my name is Luke Soge.
I'm Senior Vice President for Hill Corp, Alaska,
and I am honored to represent the 1,750
Alaskan employees that HillCorp has
who are committed every day to safely producing energy
for the state of Alaska.
So I have a presentation,
well, I'll give you an overview of Hillcorp,
who we are, what we do.
And then I've got, you know, a part that focuses on the Cook Inlet Basin and our activities there.
And the second half will focus on North Slope and their activities, there
We have, as I said, 1,750 employees in the state.
We also support another 3,500 contractor jobs indirectly through our activity.
eight drilling rigs, that's six on the North Slope, and two in the Cook Inlet,
that is more than all other operators combined.
And we operate 350,000 barrels per day, of which about 160, 000
are hillcorps barrels. The rest of those barrels belong to our
valuable partners, Conoco, Exxon and Chugach Electric.
We are a private company.
So, you didn't see a disclosure side from me, so trade away on anything I say.
We're a private company.
We operate exclusively in the United States, and we are in nine states throughout the U.S.
Alaska is the state with the largest footprint for us.
It's a very important state to Hill Corp.
We've been an operator in this state since 2012 when we came to the Cook Inlet by acquiring
Chevron's assets.
And I think it's important to talk a little bit about our business model.
I really liked the way the Conoco folks presented kind of the four buckets.
I like they said, maintaining the base production, large major projects, generational investments
and exploration.
And so I'll borrow their nomenclature.
and typically their fields that the owner has decided are near the end of their economic life,
they don't see any additional development potential and they're ready to move on.
We generally do not engage in much exploration. That's not really our core skill set. We do a
Once we've acquired a field, we empower the employees that work there to make the best decisions
about how to reduce operating costs and be as efficient as possible. This allows us to generate
free cash flow, which we are able to then reinvest in these assets. And to be clear,
we don't acquire assets to sit on them and watch them produce and collect a check. We acquire
significant additional development potential and so I want you to keep that
in mind as we talk through this. That's really the focus of my remarks here
today. Anyway, we'll move on, that's Hill Corp. These are some of our, these are
some our 1700 employees. The three of these pictures, the ones with the most
people in them, are pictures of are employees that are working in the
We have about 300 employees in the Cook Inlet. Of course, those are all Alaska higher. We
have another 200 or so in The Anchorage office and obviously those people all live in Alaska
as well. I think one of the things that we're really proud of is over the last 14 years
that have been here, Hill Corp has contributed over $24 million to the local community and
Hillcorb empowers all of our employees to give that money away
Rather than you know, Mr. Hildebrand or myself or someone making a decision about which
Nonprofit or charity is going to get a big check. We give each of Our employees the ability to
Give away some of the money and so, you Know, they can give to causes and groups that really matter to them
That's you, know in a line with our philosophy of
empowering our workforce.
So we talked about our work force.
I've got a couple of graphs here that talk about the last five
years and the way that Hillcorp has grown over the
last 5 years in the state of Alaska.
We can talk
about
the impact that we have on the
state.
So our Alaska employees 5
years ago we had about.
And over the last five years, our footprint has grown to 1,750 employees.
So steady growth in direct employee headcount.
And that's as we take on more projects and higher activity levels, we need more people
to operate.
So we talked about direct employees, and we also have indirect employees – these
are all the contractors that work for us.
You know, five years ago, we had about 2,500 indirect workers working on all of our projects.
And over the last five year, that's grown to be about 3,000, 500, so about 1, 000 additional jobs over
the past five, years.
And so what are all those people doing? Well,
we're an oil and gas company, and so, you know you don't get any oil
and guess if you're not drilling new wells,
that is why I keep coming back to talking about rigs and wells.
So over the last five years, you can see this graph shows the number of wells that we have drilled in different locations.
And we've seen it dramatically increase. We drilled 90 wells in 2025, and we're going to drill more than that in 2026.
And then finally, all of this comes down to dollars.
you know, in all sources inside the state of Alaska.
And that's wages, that construction projects,
that new drilling projects.
That's buying materials.
And, and that has grown steadily over the last five years
to where now in 2025 we are deploying on behalf of ourselves
and our working interest partners, Conoco and Exxon,
a little less than $4 billion,
almost doubling over last 5 years.
And you'll see as I...
continue through this presentation. That's really because we've taken on some very
large projects that we're moving forward through development.
So, we are going to transition now from high level stuff to talking specifically about
our activities in the Cook Inlet Basin. We are the only major operator in Cook inlet
We are very active.
We deliver about 50 billion cubic feet of natural gas per year
to the South Central community, the rail belt.
We've been here in the Cook Inlet Basin since 2012.
And over that time period, we've delivered over 750 billion
cubic of Natural Gas.
We have drilled 192 wells.
You may remember, if you're from the south central area back
in 2012, there was concern that we were running out of gas.
acquired chevron's assets and we immediately began to invest in those assets, and, you
know, we so far have bought us an additional, well, us as a community, an
additional 14 years of secure gas supplies. So it's really important to us.
We all live in the area. And so it was a big focus for us,
we have deployed over $1.5 billion in The Cook Inlet in that time period.
a year in the Cook Inlet Basin. This year, as I said, we're running two drilling rigs full-time
all year which is quite challenging. And that's the first time that we've been able to do that.
So we continue to increase our activities. A couple of important comments,
I hope you already know this, but you may not. Oil and gas wells naturally decline.
When you drill a well, that first day of production from the well is really the best
day that well's ever going to have.
And after that, it declines at about a 30% or 40% rate per year in the Cook Inlet Basin.
That decline varies depending on the location of the Well and the nature of The Reservoir.
I think you already know Cook inlet basin is unlike many other markets in that it's
a closed system.
So no gas comes in today and no gass goes out today.
is important to change as we look to the future. We need
more gas coming into the basin in one form or another.
Either a natural gas pipeline from the slope would be great.
We're all working hard on that. LNG imports would
be good.
We needed some other source. we need to see additional development
of the discovered but undeveloped resources
in the Basin.
So we talked about drilling. This is a graph showing the total wells drilled each year going back to the last over 20 years now.
And in green is the wells drill by Hillcorp, and in gray is well drilled by everybody else.
And what you can see is that we have drilled more wells than everybody has combined in the Cook Inlet over the past, you know, 14 years.
Hillcorb was the only company drilling any wells, and that was a serious problem.
I think I first used this graph in 2023 when I presented, I
think, to this same committee.
And I'm, you know, at the time,
I said, look, we have a problem, nobody else is drilling.
So I am pleased to show the graph now.
And look there's a gray, a small, but there is a grey bar there on top of the
HillCorb activity.
John Hendricks and Fury are.
drilling wells and that's really good. That's important for South Central Alaska.
You can see we project our 2026 activity to be the highest we've seen in quite some time and
that is 100% focused on gas. This slide is a basic supply and demand slide for south central Alaska
John Sims with EndStar showed very similar data in his testimony yesterday to the Energy Committee, so I won't belabor this one
I'll just make a couple of observations. We you know, we agree with their with there take on the situation
South Central Alaska uses
65 to 70 billion cubic feet of natural gas per year
That's the red line and that really doesn't change a little less when it's warm in the winter
If you have a warm winter, you use a little less gas.
If we have really cold winter like it has been so far,
you'll use little more gas, but it's really in that range
every year, 65 to 70 billion cubic feet.
The green bars show how much gas Hillcorp has supplied
to the market every ear.
The gray bars, show the amount of gas supplied
by all other cook and let gas producers each year.
So a couple of observations.
One, you can see that Hillcorp's gas supply has remained about the same year after year.
We supply about 50 billion cubic feet a year, and we're able to do that because we have
very high activity levels.
We drill a lot of wells.
We fix a lotta broken equipment.
We're recompleting a lots of well's, always looking for gas.
The other thing you see is that the gray bar shrinks.
It was 29 BCF in 2016, it shrink and shrinx and shrink 2025.
And what that means if Hill Corp is delivering the same amount and everybody else is shrinking
That means that starting in you know around 2023
We have a gap between the amount of gas that is needed and the number of guests that's available
So obviously the lights didn't go out in 20 23. What happened a little bit of flexibility and gas
demand, but mostly we've been as a community, we have been drawing out of storage for the last
several years, and we had not been refilling our storage as completely as you would in a, in
a pot, you know, the best situation. That's not a sustainable trend, right?
I'll talk a little bit about pricing. I think it's well known that Hillcorp signed a consent
And that consent decree was basically an agreement that said,
we won't charge more than a certain amount each year for the gas
that we make available to the market.
It's a ceiling on gas prices.
That consent degree ended in 2017.
So the blue line here shows consent
The green line that extends out into the future shows the price that Hill Corp has charged
for our gas.
So you can see we never charged as high as we could have under the consent decree pricing.
The dotted line is an extrapolation of that consent decre pricing just for interest sake.
The consent degree is gone.
It's no longer in effect.
market for natural gas in South Central is about $14 in MCF and you can see that in a couple of different
you know contracts that are public contracts. The most recent and probably biggest was the
contract that Fury did with EndStar and it was about 14 dollars for interruptible gas sales.
That's that's the current market, for Natural Gas.
line is the price, the weighted average price of the gas that we sell in Cook Inlet. So again,
a lot of our gas,
the vast majority is sold under long-term fixed price contracts, okay?
So I talked a little bit earlier about how we are taking more gas. We as a community are
taking gas out of storage than we're putting in. And so I think it's worth reviewing how the
When it's cold in the winter, we use a lot of gas.
When its warm in summer,
we used much less.
Oiling, the gas wells in
the inlet produce about the same amount of
gas all year long,
sometimes a little more,
sometimes little less,
and so what that means in practice
is that in this summer time,
we inject gas into storage reservoirs.
Those are depleted gas fields underground,
basically inside the footprint of existing gas
fields.
You put the gases back into the ground.
and you build the pressure so that in the winter time, when it's really cold and
you need the heat, you can pull that gas back out of the ground and distribute it
to the customers. That's the basics of gas storage. There are four gas
storage facilities around the Cook Inlet and three of them are operated by
We do not operate that one, and historically that was the only commercially available gas storage facility.
And back in 2024 we had some really cold weather.
There were some operational challenges with SINGSA.
And the thing about gas storages is once you put it in, if you can't get it out, it doesn't do you any good, right?
And that's like if your bank won't let you take the money out you don't like that bank.
And we were asked to step in and provide the necessary gas for a very, very brief period
of time, we're unable to meet the demand requirements.
So on the heels of those events in 2024, some of our customers came to Hillcorp and expressed
their interest in gaining access to our gas storage facilities.
very proud to say that we have done that.
So we worked with our potential customers,
we filed an application with the regulatory commission
of Alaska to make this a regulated storage facility.
We went through that whole approval process,
which was super interesting, it turns out.
I learned a lot.
And recently announced that
we had signed some storage agreements
with a couple of the utilities.
So that's pretty neat.
We like to find additional ways to work with
and continue to be part of the solution.
I think there's additional demand for storage.
I thing that the most efficient way to increase storage
at this point in time is inside existing storage facilities.
Pool six is an obvious one.
We operate the pool six storage facility.
That's the one we've.
given access to for the utilities it's regulated and we could you know
relatively easily double or even triple the size of that facility or
even you we can do ten ten times as much gas it a very large reservoir we
only use a small small portion of it so we get increased that
And over the course of this year, we're going to try to provide access to the other storage
facilities if there's any interest on the part of the utilities.
They represent some geographical diversity.
They're in different physical locations, which provides access
to different pipelines.
And they're a little bit different profiles.
can deliver gas at very, very high rates,
although it's a relatively small storage facility, right?
So it can provide some emergency gas backup.
So that's something that we're interested in.
And as we look at how do we help bring additional gas
supplies into the inlet, this is a key piece.
Couple of pictures for you here.
On the upper left is the Tionic platform.
our biggest gas-producing platform in the Cook Inlet. It produces about one-third of all of the
gas that we produce in The Cook in La Basin. You can see that our jack-up drilling rig,
the Spartan 151, is snuggled right up next to it. And so the spartan is drilling on the
pretty Creek field. This is a field on the west side of the Cook Inlet. We don't have
road access to this area.
We have some roads that we maintain, but the only way to get there is by
barging back and forth across the cook inlet,
what that means in practice is that, we can only develop this
area in the summertime when there's no ice in
the inlets, so it limits our ability to access it.
I was told to make sure that I say we support that westerns who sit in the access road.
That would give us access over here and allow us to drill a full time.
But this is neat.
This is the diamond pad at Pretty Creek.
That's a new pad and new wells.
We did all of that in one year to get this gas online.
And then there's, you know, there is a picture of our rig drilling at Beluga River.
We operate that on behalf of ourselves and Chugach Electric who owns two-thirds.
We drilled eight wells on the west side of the Cook Inlet this summer, which is record
for us.
It's one of preferred drilling areas, and so, we expect that to continue in the future.
The Tionic platform, as I said, is our largest gas-producing platform.
Typically, you drill wells down through the legs, and there's a limited number of slots in each leg.
Once you've drilled all of the available well slots,
you can't drill any more wells in those legs.
So we have, in fact, drilled every available
well slot on the Tiantic because it's
a great field,
and we're looking for ways
to drill additional wells on this platform.
And what the team came up with was putting an ice breaker
on the outside of the leg.
So this is a huge steel shell, basically,
that was designed and manufactured at steel fab in Anchorage.
We shipped it out to the platform
and put it in place where it will protect the
the wells that we're going to drill through it and you can see on the far
right there is kind of a mock-up. The wells are in red, the ice breakers in
green. So I have a video which I think will work that shows this whole process
in kind a time lapse. I'll give you a little bit of narration.
So first we modeled this
whole thing. We did a computer simulation to see how it would actually
work and we were it was
a really great practice because we then modified our lift plan based on the simulation or some
things we learned. So the process is dropping this thing with a crane and then picking it back up
with winches and getting it over onto the leg because you can see the platform overhangs the
leg. Okay, and picking this up requires two cranes, right? So there's the guys doing the safety
This piece of steel weighs, as it says,
as much as a Boeing 737.
We used two cranes to pick it up.
We had to mobilize a separate crane out there,
and then eventually hand it off to just the one crane.
And you can see they're gonna move it over
to the side of the platform and drop it down.
The piece that made us the most nervous,
there you see the jack up rig is there
while we were doing this.
We got a lot going on.
This is the part that made us the most nervous.
When you drop something down into the cook inlet,
there's roughly eight knot tides,
and we couldn't model how that was gonna behave
once it hit the water.
So you can see it worked out just fine.
There's the handoff where the winches pick it up.
And one of the things that we learned to do
is put these little hooks on the sides
so it can rest in place before it's welded.
You'll see the boat come over and really push it into place.
All right, so then they they set it up there and then the welders are able to come in and weld this thing into place
So I show this because this was a complicated and expensive project
And it's a you know kind of a symbol of our commitment to continued very high levels of activity in the Cook Inlet
We bought this jack up two years ago for the same reason
All Right, we really believe in The Cook inlet and we believe it is important to continue to invest there
So I guess before I transition to talking about the North Slope,
I think something that, a question?
You can finish what you were saying and then maybe we'll take some
cook-in the questions before we move on to your slope if that's okay.
Sure.
Okay.
So what I was going to say is, you know, something
that touches on the north slope and cook inlet is this north
slope gas line export, gas export project.
Um, so we are pleased to partner with Glenfarn to advance this critical energy infrastructure
project and entering into this phase one gas sale precedent agreement as we have.
I think that was announced the other day.
That's an important step towards moving North Slope gas to market, delivering reliable
energy to in-state customers and helping to address the ongoing Cook Inlet, uh, gas
supply challenges.
We think that's really important.
We're proud to serve as the anchor gas supplier.
The majority of the gas going into that phase one pipeline
will be Hill Corp gas.
We are committing early volumes at competitive terms
to help get this project moving forward.
And then, you know what I'm going to say next,
market predictability supported by a stable
and consistent regulatory and fiscal environment
remains essential to all aspects of our operations
in Alaska including this important project.
Thank you. I've got representative elm then representative fields. Thank You
Appreciate the presentation
So yeah, there was a lot of a lotta great information there. Um, I had I guess two questions
You know first off
how do you guys feel about not only cook and let oil or gas but also the oil we have our refinery
there which is pretty dependent on a lot of of the cook-and-let oil and then the the second one
is is there anything you know keeping you up at night as far as you you
know the progress that there's a lotta good information that everybody's been sharing
Looking at things here that might you know be keeping you guys up
Through the chair
Representative Elam
Yeah, good questions. I on the oil side
There's no nice way to say it the Oil producing assets in the cook inlet are exceptionally challenged they
They're you, know, they're very expensive to operate particularly offshore. They are very expense of operate. We have very high fixed costs
In many ways, I would say they're almost subsidized by the gas assets, but I think it's important
to continue to operate them as long as we can.
You asked me how that allows me time for it, because oil prices are fairly low right now,
so they look exceptionally weak at this point in time.
We do believe prices will recover.
Over the next several years, we expect to see these assets become competitive once again.
You know, look, this is, if I think about the core of our company culture, to me in Alaska,
to, me, that's our cook and let assets.
It's where we've been the longest, the operators and the teams out there really understand deeply
what we do.
So it continues to be very important, but they are, they're finite.
The oil size is financially very challenged.
Your second question, is there anything keeping me up at night?
The cook inlet gas situation gas supply situation in particular was literally keeping me up at night
It really bothered me as somebody whose family has lived here
That's not the case anymore actually feel the best today that I had in quite some time and that's because I
Think there is a wide recognition on the part of maybe not everybody in the community
But I think you guys understand in this room
I thank the utilities understand the need to take action pretty clearly
We're seeing meaningful progress on a gas line from the slope and we're
seeing a meaningful project on not just one but two LNG import projects.
So are all those things going to happen? I don't know, but I bet at least
one of them does. And if one those thing goes forward and sorry I left out,
John Hendricks is drilling his fields. I'm hearing that maybe Bluecrest
is going drill their fields, we as a community
are doing all of the right things which makes me feel a lot better
So just one follow up. Thank you. I appreciate that. And then also the the commitment that you
guys have made to to participate in potential LNG from the North Slope. Is there any additional
thoughts that you have. I know there's been some some concerns about making sure that we had,
you know, gas that would come from the north slope down to or down the pipeline. And I
appreciate your guys's commitment to that. Is there any anything else that
you might want to share with us? I mean, I think I pretty much said it, right? We think phase one
is really important for a variety of reasons. Um, and you were pleased to provide most of the
Thank you representing you representative fields in just a time check. We've got about nine minutes
Till the end of the hearing so thank you
Through the chair. Thanks for the update. So if phase one of a klng proceeded in from what we've heard in house energy
We would be looking at $16 per mcf or so
Price for n-star. I assume hillcorp is planning to continue to produce
Gas from cook and let for other utilities, which could be cheaper is that
an accurate assumption. In other words you all are continuing to explore and produce and not
we're not putting our all our eggs in the basket of phase one. I hope. Through the chair,
Representative Fields, I guess I won't comment on the price of somebody else's gas.
It is definitely our intention to continue to be active and
cook in for the foreseeable future and to
continue, you know, supply gas at a competitive price.
Great. If I could ask a separate question on storage, I don't
know not know much about what it takes to increase storage
volume and some of the reservoirs you mentioned,
I think the largest one you mention was an onshore or
access to is on shore. Could you explain a little bit more
about the actual work that goes into expanding that volume?
Thank you.
through the chair, represented fields, for sure.
Think about, so there's two pieces I'll say, and I use our pool six storage facility as an example.
The original volume in that reservoir, that's what is now a storage reservoir.
The originally volume was about 500 BCF, 500 billion cubic feet.
Most of that gas was removed and sold back in the, whatever, 80s.
And since the early 2000s, it's been a storage reservoir.
And so what we know is you could put hundreds of BCF back
in that reservoir because that's what used to be there.
The question is how much pressure is that going to, you know,
how many pressures that can result in?
And, so, for part of it.
We just need to go to the railroad or not the railway commission the AOGCC and say we would like to increase the pressure in this storage reservoir
to you know, whatever amount and that's going to result in
You know another hundred BCF of gas storage capacity available and
That would be very simple and straightforward and would take you. No barely any time at all. That's just paperwork
The other piece that would takes some more time is
you need
If you want the ability to pull higher, pull gas out at higher rates than we have today,
so today you could probably pull, I don't know, 65 or 75, oh no, that's not right, like
110 million cubic feet a day out of pool six, depending on pressure.
If want to put more than that out on a given day, you would need to add additional compression
Potentially drilling additional wells, although we have a lot of existing wells that penetrate that reservoir, and we could simply access the reservoir through those existing well's.
So it's compression and maybe converting, maybe drilling some additional well.
This is kind of the things that we do every day in the cooking.
Thank you. And then we've got one final question from Representative Prox.
Thank thank you, I was wondering more about.
How cook and let works if phase one gets built it kind of sounded like the gas to phase 1 would come from cook in
Let is as opposed to the North Slope
Through the chair represented Prox. No, that's not correct. It's North slope gas
It'S gas from the north star field and in fact you can you see on this slide the
North Star field would supply gas and point Thompson would apply gas
So North sloped gas would go down through the line to cook
And it would also it was supply
south central Alaska in phase one okay we'll have to follow up on that later quick one we haven't
talked about co2 storage do we have time to even think about that this hearing uh through the chair
you know i've got another 40 minutes of slides oh right slope uh co-sto storage is something that
I think it's Sumitomo.
They have a study going on, they're building CO2 tankers
to bring CO-2 into the cook inlet potentially.
So yeah, it something we're definitely pursuing
and investigating.
Sumatomo's lead on that though,
is they are kind of that carbon capture guys.
We would be the sequestration side of it.
Okay, I'm looking forward to another slide joke.
Thank you.
Thank you, Representative Prox, and we've got about four minutes to get through your 40 minute slides.
I'll talk fast. Just go ahead and cut me off when I'm when i'm at time.
So these are all the fields that we operate on the North Slope, Point Thompson, on
the East, Endicott.
We operate the Liberty Prospect, which we're pursuing at in federal waters.
Of course, we operate a very large Prudhoe Bay field on behalf of ourselves and our partners,
Conoco and Exxon. We operating North Star, an island out in the Arctic Ocean.
We operated the Milney Point field, where we've just about tripled production since taking ownership
back in 2014. And in 2024,
we acquired some assets a little further west.
where we are very confident that we can more
than double production in the next several years.
I'm trying to think about how to shorten this a little bit.
You know?
Actually, I was going to,
I wasn't curious and wanted to ask if you would be willing
to come back to another hearing to conclude this presentation.
I think it's really important information
and I don't want to cut you off and the committee
as they may have questions.
Through the chair, I think we can certainly do that. It might not be myself
But I someone certainly can come back and and follow up on this
So I'll get as far as we could and we just call it now
What is the will of the committee? I mean we're about three minutes, so I don't want to stop you and then get you back started again
I do
So with that I suppose if there are any questions about cooking that that weren't addressed
again, email them to house resources and we'll get those out too. We'll distribute them out.
I do. I want to thank you for joining us and presenting today. And I also would like to
acknowledge that I have constituents in the room.
And, I've got Nuggar Kachark with the voice of the Arctic is here, and Kate Woldemeth,
and they're not actually my constituents, but they are, because they live, you know,
down in South Central, BUT they've from the North Slope. So,
I would be remiss if I did not mention them being here.
So, with that, the time now is 2.58.
Our next meeting is Friday, January 30th at 1 PM, where we will have introductory hearings
from 4 House Bill 247 from Representative Josephson, creating a climate change response fund,
and House bill 258 from representative staff,
creating statewide spay and neuter program.