DNR projects near-term North Slope production gains as Pika comes online, Willow to follow

The Department of Natural Resources told the Alaska House Resources Committee on Jan. 23 that state oil production should rise in the near term as new projects come online and redevelopments in mature fields continue.

"We are actually forecasting an increase in production over the next 10 years," said Derek Nottingham, director of the Division of Oil and Gas, who told the committee DNR's official forecast projects an average of about 465,000 barrels per day in fiscal 2026 and nearly 520,000 bpd in fiscal 2027. Nottingham attributed much of the early bump to the Pika development in the Nanushuk play, which the department expects to begin commissioning in March or early April and to ramp from roughly 30,000 barrels per day toward a 80,000-barrel-per-day capacity.

John Crother, DNR commissioner designee, framed the presentation as "a good news story" and said legislators requested more production detail to inform revenue and resource policy decisions.

Why it matters: the forecast changes the state's near-term revenue outlook and affects pipeline throughput decisions, royalty valuations and permitting priorities. Committee members pressed DNR about field-level differences and operational constraints as legislators consider oversight and potential policy responses.

What DNR presented: Nottingham reviewed decades of North Slope production and named several contributors to the forecasted growth: - Pika (Nanushuk): phase 1 near-complete, modules and seawater treatment in place; roughly 24 of the planned ~45 wells drilled on the initial pad. DNR expects initial production to start March–April and ramp over months. - Willow: DNR said Willow remains on track for first production around 2029, with a projected peak rate of about 180,000 bpd and an estimated ~600 million barrels recoverable over the project's life. - Redevelopment activity: Hilcorp's work at Milne Point was highlighted as an example of a mature-field turnaround, bringing that unit back to production levels in excess of 50,000 bpd through techniques such as polymer injection and infill drilling.

DNR also described other potential contributors — Colville River CD-8 (an estimated potential of ~20,000 bpd, with stakeholder engagement and EIS work underway) and Prudhoe Bay Tiaga pads (two pads with a combined peak estimate of ~40,000 bpd).

Committee questions and operational context: legislators asked about reservoir differences (Kuparuk vs. Prudhoe/"Iviqsaq" reservoir descriptions), pipeline low-flow operational limits and the economic effects of lower throughput on state royalty value. Nottingham and Crother warned that although pipeline modifications enable lower flows, operating costs rise and tariffs can reduce royalty receipts, which in turn influences project economics and the state's revenue.

Lease sales and market signals: DNR said fall 2025 state lease sale drew strong interest, with $17.5 million in bonus bids — the highest since before the COVID-19 pandemic — and the most acreage leased since 2014. Nottingham said the Brookian plays and proximity to existing infrastructure supported that interest.

What happens next: DNR scheduled follow-up company briefings and the committee plans presentations from operators at its next meeting. The department told members it will provide additional historical lease-sale context and further production detail on request.