This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Shale Oil: Geologist's Alaska Gamble Could Turn Into America's Next Big Shale Play

The rig that Great Bear was using had already been contracted by another company for the North Slope's winter drilling season. As a result, Duncan was forced to scale back his plans and regroup.

Supply-chain issues are driving the cost of drilling in northern Alaska. "You don't have a lot of materials," Duncan said. "You have companies competing for few rigs. The rig rates are high. Labor costs are high. Material costs are high on the North Slope."

If their initial unconventional oil wells are successful, company officials plan to expand development into leases located farther away from the Dalton Highway. The promise of new oil wealth could also attract other oil operators to the North Slope.

Since Great Bear burst onto the Alaska oil and gas scene in 2010, other companies have bought state leases for unconventional oil development. San Diego oil and gas company Royale Energy Inc. (Nasdaq:ROYL) acquired 100,000 acres near Great Bear's operations. ConocoPhillips secured a smaller block of leases farther west.

Such expansion could help moderate the cost of operating in the region. "We'll see economies of scale as we drill a large number of wells per year to develop this play," Duncan predicted. "Additional rigs will come into the market, costs will come down, efficiencies will be discovered and exploited."

"We believe we can drive the cost on a per-well basis, drilled and completed, down to something that will be reasonably competitive with the lower 48," he said. "That's a big mission for us -- to break the cycle of what we perceive as really unnecessarily high costs in northern Alaska."

For the time being, however, Duncan and Great Bear's oil experts are studying the scientific data collected last year, securing permits and gathering new environmental data it will need to speed future operations.

As the international oil giants continue to dominate Alaska's conventional oil and gas fields, Duncan's small company is staking a dominant position in the North Slope's frontier fields for unconventional energy.

6 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $92.69 -0.59%
FB $119.49 1.40%
GOOG $711.11 1.40%
TSLA $214.84 1.60%
YHOO $37.23 0.79%


Chart of I:DJI
DOW 17,740.63 +79.92 0.45%
S&P 500 2,057.14 +6.51 0.32%
NASDAQ 4,736.1550 +19.0610 0.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs