2017 will start with hope in Alaska’s oil industry as prices continue to inch towards $60 per barrel. But where prices will go is anyone’s guess.

State government and industry both hope OPEC’s deal to cut production by 1.4 million barrels daily has teeth and can keep prices on the recent upward trend.

Whether Lower 48 shale oil producers have made the operational improvements necessary to make their product profitable at prices below $60 — as many industry analysts have suggested — could be born out in the coming year and have a significant impact on where near-term prices settle.

Announcements of very large new oil finds particularly in the Texas shale fields indicate no lack of reserves; it just depends on the price that makes producing the tight rock oil a worthwhile venture.

The State of Alaska’s official price forecast is bearish. It has oil prices for the 2017 fiscal year, which ends June 30, averaging about $47 per barrel. In fiscal 2018 the expectation is a $54 per barrel average.

State production projections are not pleasant either. North Slope production is expected to decline 5 percent in fiscal 2017 to about 490,300 barrels per day with another 7 percent drop-off in 2018 to 455,500 barrels per day.

The state’s production expectations are by nature conservative, but the sudden expected return to decline would come after the 2016 was the first year of increased North Slope oil extraction since 2002.

A couple explorers have plans to look for long-term production in 2017.

Small Australian independent Accumulate Energy should start drilling a second exploration well early in the year at its unconventional Icewine oil and gas prospect south of Prudhoe.

Accumulate’s parent companies dominated the state’s North Slope lease sale in December, buying up rights to more than 400,000 acres and furthering hope that initial positive drilling and seismic results from Icewine can be built on.

Armstrong Energy will also be shoring up its 120,000 barrels per day estimate from its Nanushuk project with an appraisal well this winter. Company CEO Bill Armstrong has also said his team plans to drill a “true wildcat well” on state leases about 25 miles south of the existing prospect.

To the south, the results from Ahtna Inc.’s gas exploration well, which was completed a couple weeks ago, should be known early in the year.

In Cook Inlet, BlueCrest Energy will be working on two production wells at its Cosmopolitan oil project near Anchor Point. The company began drilling the first well in late November with the hope to produce up to 9,000 barrels per day once the pair of wells is online.

ConocoPhillips could also continue its slow exit from the Inlet in 2017, as its iconic Nikiski LNG plant is currently up for sale.

Finally, whether state leadership is the last gasp or a major turning point for the Alaska LNG Project should be a lot clearer by the end of the coming year. Gov. Bill Walker and Alaska Gasline Development Corp. President Keith Meyer said in the second half of 2016 they would need about a year to size up the long-term Asian LNG market and decide the future of the project.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.