Caelus delays drilling at Smith Bay, leaving a big Alaska energy prospect unconfirmed

Tuesday, 27 June 2017, 03:28:24 PM. The company cited low oil prices, uncertainty over taxes and the state's unpaid tax credits as factors in its decision.
Awaiting payment of at least $75 million in state tax credits and facing a long-term downturn in oil prices, an independent oil company says it won't be drilling an appraisal well at its potentially giant discovery at Smith Bay this winter as originally planned. An official with the producer, Caelus Energy Alaska, said Thursday that the decision to delay drilling at the remote site is also based on uncertainty over the oil-tax system, which state lawmakers are considering changing. Nonetheless, Casey Sullivan, a Caelus spokesman, said the company is encouraged by the position taken by Gov. Bill Walker that could expedite payment of hundreds of millions of dollars in the tax credits that Alaska owes to oil companies. Sullivan said Caelus awaits payment of between $75 million and $100 million for past work done at Smith Bay and other operations in Alaska. The state considers that past work to be investments for tax purposes, and can be claimed as credits. "We are encouraged by steps the governor has taken to compromise and pay some of those commitments," Sullivan said. The governor has indicated he could support a measure from the Alaska Senate — boosting money available for the state's tax-credit payments by roughly $300 million — as part of an overall compromise package to bring the House and Senate together to help ease the state's fiscal crisis. Walker said Thursday afternoon that he had received a call earlier in the day from Caelus Energy founder Jim Musselman who, he...Read more
Share this

You might also like