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August 02, 2019 --- Vol. 25, No.29August 2019

State issues preliminary finding on Gulf of Alaska exploration license

The Alaska Department of Natural Resources' Division of Oil and Gas issued a preliminary written finding Aug. 2 in favor of granting a 10-year oil and gas exploration license to William H. Stevens of Cassandra Energy Corp. on 65,773 state-controlled acres along the Gulf of Alaska coastline.

The license area consists of state-owned, unencumbered land within Township 19-21 S., Range 5-8 E., Copper River Meridian. It includes state land and water in and around Controller Bay from north of the Okalee Spit northwest to Katalla Bay and Point Martin. The license area boundary includes the eastern edge of the Copper River Delta State Critical Habitat area, as well as Kanak Island and waters around the mouths of the Bering, Nichawak, Campbell, and Edwards rivers.

The primary access route to the region is by marine vessel.

The proposed work commitment for the Nikiski, Alaska-based independent is $1 million. Once the work commitment is met, the licensee can request a conversion of the license to a lease with no other written finding required.

Initially received on April 23, 2015, the proposed license has undergone lengthy agency and public review. The final public comment period will end Oct. 4. All public comments on the preliminary finding must be received in writing by that date.

The license includes the Katalla and Yakataga area. Oil seeps were reported in the Katalla region and the north side of Controller Bay as early as 1896. Commercial activity began in 1900, when Sir Thomas Boverton Redwood encouraged a British consortium to drill an exploration well near Katalla Meadows.

The next century featured numerous attempts to develop the region, including the famous Katalla-Yakataga contract of 1951, when a group of investors and an Oklahoma oilman and senator used an obscure provision of federal law to convince the Interior Department to issue a development contract over a large area near Icy Bay.

That effort and others immediately following it were hampered by poor access and well results - and were, of course, lacking today's advanced seismic and drilling technology.

Various owners drilled at least 44 wells in the region, with 154,000 cumulative barrels of oil produced by 1934, when the Katalla refinery burned.

A second push in the early 2000s was delayed by challenges by environmental groups. An exclusive federal development contract held by Chugach Alaska Corp., which has partnered with Cassandra, expired in 2004.

- Kay Cashman

See story in Aug. 11 issue of Petroleum News, available online Friday, Aug. 9, at PetroleumNews.com

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