The most important thing that happened in 1963 was the discovery of oil by Shell et al. under the waters of Cook Inlet. Tests indicate producing capacities of at least 600 bo/d are possible. This is the first real encouragement the industry has seen insofar as oil is concerned since Swanson River was discovered in 1957.

The second most important thing that occurred was the high level of exploration on the Arctic Slope. Five seismic crews operated during the year and a sixth was moving in at year's end. Ten operators did 29 crew-months of surface geology during the summer.

Exploratory drilling decreased to 18 wells this year. Several of these were suspended for the winter and will presumably become active again in 1964.

The seismograph continues to be a popular tool in the Cook Inlet where more than 4 crew-years of work were done. This work will undoubtedly manifest itself at future lease sales and in exploratory drilling.

The Copper River basin seems to be going through a period of renewed interest by drilling, seismograph, and surface exploration. Two wells were completed and a third started. Three seismic crews were active and three operators had surface crews in the basin.

Exploratory activity in the other basins was not spectacular. It remained constant, but at a low level in some and decreased in others.

Over-all exploration for the state should increase the next few years, particularly in the Cook Inlet basin and on the Arctic Slope. The Bristol Bay and Copper River basins will probably be actively explored but not to the intensity anticipated elsewhere.