ANCHORAGE (KTUU) - In a report issued by oil giant ConocoPhillips, summarizing their economic outlook following the end of 2017, Alaska stood out as a large profit center, turning out a $652 million profit in the state, a large gain over their end-of-2016 share of $233 million.
In the last quarter of 2017 alone, ConocoPhillips reported a $283 million profit, which itself is higher than the entire 2016 report for the state.
Overall, the company's portfolio featured marginal gains for the year, with overall revenue in 2017 increasing over the previous year thanks to peaking oil prices. In Alaska specifically, a big addition came with the company buying up the remainder share in the Western North Slope drilling assets, bringing ConocoPhillips into "100 percent ownership of these assets.".
While the acquisition cost the company $400 million, a good chunk of the profits generated by the state's oil. During a conference call last week, the company's CEO said it's part of an overall investment in remaining "opportunity" in the state.
"Alaska has been one of our legacy areas for a long time for the company," said Ryan Lance, ConocoPhillips CEO and chairman. "Despite us being in Alaska for 40 years, the largest producer up there, we still see a lot of opportunity."
With the belief that the Willow discovery in that area could churn out 100,000 barrels a day, Lance said he believed that the buyout was right for the company and expects to see growth slowly increase in the coming decades in Alaska.
"Makes a heck of a lot of a sense to us to pick up that interest and be in complete control, 100 percent and control the capital pace and destiny over there," Lance said. Al Hirshberg, executive vice president of production, said this was an "opportunistic" aquisition when asked about it during the call.
"I noticed that your spending rose in Q4 and that you made a strategic acquisition in Alaska as well.
In addition to Alaska, ConocoPhillips said they observed positive trends for oil throughout the year. During "much of 2017," the company said oil was below $50 per barrel, but in the early stages of 2018, that figure was exceeding $60 per barrel.
When asked during the conference call if this uptick would change their strategy in the coming months, Don Wallette, the company's executive vice president of finances and Chief Financial Officer, said that isn't as significant as it might seem.
"We're not going to get overly excited about the high commodity prices right now," Wallette said. "I think it's only been about 50 or 60 trading days since Brent broke $60 a barrel so there's a lot of volatility in the market as you've seen. We're not changing our baseline."