Alaska’s largest oil producer ConocoPhillips (NYSE: COP) said it discovered up to 750 million barrels of oil equivalent (MMboe) of resources in the Greater Willow Area during its latest exploration and appraisal campaign.

The resources justify the Greater Willow Area, located in the northeast section of National Petroleum Reserve-Alaska, as a standalone development. Plus, upside potential exists.

But ConocoPhillips estimates it will cost between $2 billion to $3 billion over four to five years following a final investment decision, which is planned for 2021, to develop the resources. First oil is possible as early as 2024. Another $2 billion to $3 billion of drilling capital would also be needed over multiple years to maintain production at the development.

The news was delivered July 16 by the Houston-headquartered company as part of an update on its Alaskan operations.

“Efforts are underway to analyze and evaluate results from the 2018 appraisal season in order to advance development planning and future appraisal needs,” ConocoPhillips said in a release.

In the analyst and investor update presentation posted online, the company said appraisal results and 3-D compressive seismic imaging data indicate more potential on-trend resource to the north and south of Willow. A tieback to the Willow hub is also possible given an additional oil discovery at West Willow.

ConocoPhillips reported in January 2017 that it struck oil at the stratigraphic-type Willow discovery, finding at least 300 MMbbl of resources in the shallow Brookian Nanushuk geologic formation. The company has drilled six wells plus a sidetrack—all of which hit oil. The Willow discoveries are located in the Greater Mooses Tooth (GMT) Unit, where ConocoPhillips is making progress on other oil projects. First oil for GMT-1 is expected this year, and first oil for GMT-2 is expected in 2021.

Currently, the company is entering pre-FEED to size the development concept for Willow. The company said its 2019 exploration and appraisal program will focus on existing discoveries with an aim to “resolve remaining uncertainties to sanction.” Appraisal work is planned for both Greater Willow as well as the Narwhal trend, where ConocoPhillips said between 100 MMboe and 350 MMboe of resources have been discovered by the Putu and Stony Hill wells.

Plans for 2019 at Greater Willow are to evaluate horizontal well performance, determine lateral reservoir connectivity and appraise West Willow, while verifying recoverable volumes and evaluating well performance at Narwhal, the company said.

ConocoPhillips still has room to grow, considering it said 75% of its prospective acreage remains undrilled.

The exploration and appraisal push comes as the company continues to invest in its legacy assets, which include a nonoperated interest in the Prudhoe Bay Field and operated interests in the Kuparuk Field and Alpine Field/Western North Slope. In all, ConocoPhillips said it has 2 Bboe of net resource from its legacy assets with a cost of supply of less than $40 per barrel.

“We believe that the company’s Alaska plan aligns with our disciplined, returns-focused strategy, supports Alaska’s economy and creates significant value for shareholders,” ConocoPhillips CEO Ryan Lance said in a news release. “Alaska provides competitive investment opportunities and will generate profitable growth from diversified investments with significant exploration upside.

The company has continued to add to its Alaskan acreage, having earlier this month agreed to acquire BP’s (NYSE: BP) 39.2% interest in Alaska Greater Kuparuk Area and 38% interest in the Kuparuk Transportation Co. In exchange, ConocoPhillips agreed to sell interest in the North Sea’s Clair Field to BP. The asset swap followed the May closing of a bolt-on acquisition of Anadarko Petroleum Corp.’s (NYSE: APC) 22% lease interests in the Western North Slope of Alaska.

“Our shareholders realize the advantages of ANS-priced oil, competitive cash and earnings margins from our operations and our years of expertise and sound stewardship,” Lance continued. “We plan to continue to strive to safely unlock the energy potential of this world-class oil province for years to come and play an active role in Alaska’s economic future.”

ConocoPhillips is scheduled to discuss its second-quarter earnings July 26.

Velda Addison can be reached at vaddison@hartenergy.com.

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