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ConocoPhillips Alaska reports $372M net income; $293M SOA tax
Kay Cashman
On Aug. 3, ConocoPhillips Alaska released its second quarter earnings in connection with its Houston-based parent company's second quarter earnings conference call.
Anchorage-based ConocoPhillips Alaska reported net income of $372 million in the second quarter of 2023.
During the quarter, the company incurred an estimated $413 million in taxes and royalties, which includes $293 million to the state of Alaska and $120 million to the federal government.
Additionally, in the second quarter ConocoPhillips Alaska invested $363 million in capital in the state.
"Alaska's existing fiscal regime provides stability for continued industry investment in the state. ConocoPhillips Alaska has spent more than $700 million in the first half of 2023, an increase in capital activity from 2022," said Erec Isaacson, president, ConocoPhillips Alaska.
"For more than 50 years, ConocoPhillips Alaska has invested in Alaska and developed meaningful community partnerships. We look forward to future decades of progress through continued growth and investment," he said.
Since 2007, ConocoPhillips Alaska has incurred more than $43 billion in taxes and royalties to the state of Alaska and the federal government. Of that amount, about $33 billion went directly to the state.
In that same period, ConocoPhillips Alaska's earnings were approximately $25 billion.
ConocoPhillips Alaska is the state's largest crude oil producer and largest owner of exploration leases, with approximately 1.2 million net undeveloped acres at year-end 2022.
Legacy investment ConocoPhillips has major ownership interests in two of North America's largest legacy conventional oil fields, both located on Alaska's central North Slope: Kuparuk, which the company operates, and Prudhoe Bay. Additionally, ConocoPhillips operates several fields west of the central North Slope and has already begun spending on its $7 billion to $7.5 billion Willow development which is nearing its final investment decision, or FID.
More than 75% of ConocoPhillips Alaska's North Slope exploration portfolio is undrilled.
On June 1, ConocoPhillips Alaska said that funding has been approved for developing the Nuna project in its Kuparuk River unit from the 3T Drillsite on the northwestern edge of the unit.
Development of Nuna through existing Kuparuk River unit facilities will minimize environmental impacts because "the tract owners will not have to build stand-alone processing facilities solely for the benefit of these areas," the company said.
Nuna construction activities will begin this year and continue in 2024 with pipeline and on-pad construction.
Drilling is expected to start in late 2024 with first oil anticipated by early 2025, with an expected peak oil rate of 20,000 barrels per day.
ConocoPhillips Alaska said it will continue to invest about $1 billion a year to grow its Alaska legacy business with developments such as Nuna.
--KAY CASHMAN
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