Chevron USA Inc. said Jan. 19 it plans four exploration wells on the North Slope with drilling to begin in 2008, the company's first Alaska exploration venture in 25 years.

Scott Davis, vice president of Chevron's MidContinent Business Unit, told an industry conference in Anchorage the company will also begin drilling in this year in mature producing fields in Cook Inlet.

The Cook Inlet well is part of a planned $200 million development program Chevron plans for its southern Alaska operations, and will be the first new drilling in years from the aging offshore platforms in the region.

“We're very bullish on Alaska,” Davis told the conference, sponsored by the Alaska Support Industry Alliance.

Chevron considered selling the Cook Inlet offshore oil and onshore gas producing assets when it acquired Unocal in 2005, but after a careful review decided to retain and invest in the properties, Davis said.

The new North Slope exploration wells are in Chevron's White Hills prospect area, a 20-mile by 40-mile group of state leases south of the Prudhoe Bay field, Davis said. Chevron is now finishing up seismic work in the area, he said.

The new wells will be Chevron's first exploration in northern Alaska in 25 years.

Chevron is also a 25 percent owner of the Point Thomson Unit and is now engaged, along with ExxonMobil Corp. and other leaseowners, in litigation with the state of Alaska over an action by the state to revoke the unit and take back the leases.

Point Thomson has an estimated 8 trillion cubic feet of gas and 200 million barrels of condensates.

“In our opinion this is a gas field and should be developed as a gas field,” meaning that its development should wait until a gas pipeline is built, Davis said.

The state contends the condensate resources in the field can be economically developed before a gas pipeline is built.

Point Thomson gas reserves are an important part of the resources needed for a gas pipeline, Davis said.

“Reinstating the Point Thomson leases will go a long way toward getting a gas pipeline back on track.”

Talisman Energy subsidiary FEX LLC says it is close to spudding two new exploration wells off federal leases in the National Petroleum Reserve-Alaska and hopes to drill a third well this winter.

The company has two rigs moved into position at remote sites and hoped to start drilling on one by the end of January and by mid-February on a second, according to Talisman exploration manager Tim England.

England outlined the company's plans in remarks at a Jan. 19 industry conference in Anchorage. This is the second winter season that FEX is exploring in the NPR-A. The company has federal and state leases covering 1.5 million acres on the North Slope, England said.

Talisman has high hopes for its Alaska venture, but rising costs and a new state tax law have dampened expectations, he said.

“The new Alaska petroleum profits tax has had the effect of reducing the net present value of exploration prospects by 25 percent,” England told the conference, which was sponsored by the Alaska Support Industry Alliance.

“Our only hope is that oil and gas prices will be higher in the future to offset the effect of the new tax,”England said.

He said that new exploration tax credits allowed by the new state law are helpful, however. “Without those, we wouldn't be here,” he said.

“The cost of exploring on the North Slope is very high and we are looking at long 10-year lead times in developing any discoveries, so we are carrying these expenditures for a very long time before we receive any income,” he said.

England also took issue with a decision by the U.S. Department of the Interior to delete a block of environmentally sensitive but very prospective acreage from a lease sale in the northeast NPR-A. Environmental groups had mounted a major effort to persuade the Interior Department to stop the sale, which would lease lands near Teshekpuk Lake, a major breeding area for migrating birds.

“By my accounting, our company and others interested spent $40 million preparing for this lease sale, only to have a huge chunk of it postponed. These are large numbers,” England said.

“Unless the government becomes more reliable in its leasing program, companies will be reluctant to commit these kinds of funds,” he warned.

This is the second winter of exploration in NPR-A for FEX. The company drilled one well last year. No results have been disclosed.