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A billion dollar Mooses Tooth

May 08, 2014

A billion dollars would be a lot on money to pay for a sample from a ungulate’s dental work. Rather, ConocoPhillips is investing almost $1B in developing the Greater Mooses Tooth project in the North Slope of Alaska.

ConocoPhillips announced in April that it would engage in the regulatory and permitting phase of GMT1, as well as continue to progress the engineering for ultimate project approval. The likelihood of the project getting final approval for development has increased with the passage of SB21, the More Alaska Production Act. GMT1, in the Greater Mooses Tooth Unit in the National Petroleum Reserve. The company notes the following key facts related to Greater Mooses Tooth:

• Peak workforce during construction: Approximately 400, plus hundreds more support jobs
• Approximate cost to develop: $890 million (gross)
• Estimated peak production: 30,000 BOPD (gross)

In terms of project timing, the seismic work will take place in 2015, with construction in 2016-17, and first oil in late 2017.

Alaska is in the midst of a debate on its oil tax regime as its North Slope production has continued to fall. More than 90% of state revenues are derived from hydrocarbon taxation in various forms. In August Alaskans will vote in a referendum on whether to restore the previous (punitive) taxation regime or to stay with the current one.

Interestingly, ConocoPhillips holds nearly 1.1 million net acres of land in the Alberta oil sands, which represents an estimated 16 billion net barrels of resources as of year- end 2012. The company has
working interests in four major oil sands assets, as well as four additional undeveloped leases. Add it all up, and we hold one of the largest land and resource positions in the region.

ConocoPhillips (ticker COP on NASDAQ) is one of the world’s largest oil companies with a market cap of $94B.


ConocoPhillips has responded to the oil tax reform legislation passed in 2013 by the State of Alaska. The company is on track to invest $2B on its GMT1 and Kuparuk River projects. The massive investment and increased production is good news for the Alaskan economy.

As an aside, there are 200,000 moose in Alaska, but around another 800,000 north of 56 in Canada. So there are about as many moose as people north of 56.