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New inlet players outline strategies Storm Cat and Alaska Energy Alliance talk about their plans for leases won in the May Cook Inlet lease sale Alan Bailey Petroleum News Staff Writer
Storm Cat Energy Corporation and Alaska Energy Alliance Inc. adopted distinctly different strategies in buying leases at the state of Alaska’s Cook Inlet areawide sale in May. Both companies are new to Alaska, although Storm Cat had already bought some leases near Big Lake, northeast of Anchorage, in the November 2004 Mental Health Trust lease sale.
Storm Cat’s state leases all lie in the Mat-Su Valley at the northern end of the state’s lease sale area.
“The recent (state) acreage we picked up complements the Mental Health Trust acreage, so we’re putting together the acreage position for both conventional gas and coalbed methane,” Scott Zimmerman, president of Storm Cat, told Petroleum News. “… Storm Cat believes in the potential of north Cook Inlet and that we’ll be able to (work) in an environmentally safe and sound manner.”
Storm Cat is registered in British Columbia and has offices in Denver, Calgary and Ulaanbaatar, Mongolia. Zimmerman used to be vice president of Evergreen Resources, a Denver-based company that had been working a coalbed methane prospect in the Matanuska-Susitna Borough. Pioneer Natural Resources bought out Evergreen and subsequently dropped the Mat-Su acreage, to focus on the North Slope. Conventional gas first Storm Cat’s new venture in the Mat-Su Valley will initially focus on finding conventional gas.
“We will probably look first at the conventional possibilities,” Zimmerman said. However, the company expects to be able to evaluate coalbed methane potential using the same well that it drills for conventional gas, he said.
The company’s preliminary geological evaluation has identified some promising structures in the area of the leases. And the nearby ARCO BLT well, drilled near Big Lake in 1992, has caught Storm Cat’s attention.
“The old BLT well has a lot of interesting gas shows within it,” Zimmerman said. That’s one of the key wells that we’re looking at, he said.
However, coalbed methane development is a future possibility. Zimmerman is familiar with the recent controversy surrounding this type of development. He thinks that the regulatory framework for coalbed methane in the Matanuska Susitna Borough is inappropriate.
“The borough has not fully understood and has not really done the proper work and the regulations are inappropriate and improper,” he said. Drilling next winter Storm Cat is using existing seismic data and has assembled a geological team, with a view to start drilling in the winter of 2005/2006.
“We’ve put together our geological team and they’re putting together an evaluation to pick a location to drill some time late third quarter or early fourth quarter (2005),” Zimmerman said.
A consulting firm in Anchorage is doing the geological investigation and Storm Cat may itself establish an office in Alaska.
“We do not have an office but we have some consultants working for us and we’re looking at possibly getting an office up there soon,” Zimmerman said. Alaska Energy Alliance Alaska Energy Alliance is based in Newport Beach, California, and was formed by Stan Snyder and his wife Alexis Snyder to enter the Alaska oil and gas business, Stan Snyder told Petroleum News. The Snyders have been in the oil and gas business for nearly 30 years, primarily with gas interests in Colorado, Snyder said.
“We’re primarily land speculators … that’s the primary focus of our business although we are involved in some exploration,” Snyder said. “We would like to be involved in Cook Inlet exploration.”
Alaska Energy Alliance bought 10 leases scattered across the lease sale area. Four leases are on the Kenai Peninsula, four are in the Cook Inlet near Trading Bay, one is near Granite Point and one is onshore west of the mouth of the Susitna River.
“The strategy is in our first year of bidding on tracts in Alaska is to take more of a scattered or shotgun approach,” he said.
But Snyder said that his company had not expected to win so many tracts.
“In most of our bidding … we’re lucky enough if we put in 10 or 12 bids to come out with three or four tracts,” he said. “ I feel very, very fortunate that we were able to do as well as we did but I had no idea … that we would acquire what was basically 10 out of 11 applications we put in.”
Some of the leases are near Alliance Energy Group LLC’s North Fork Unit at the southern end of the Kenai Peninsula. However, Snyder said that there is no connection between Alaska Energy Alliance and Alliance Energy Group, despite the similarity in the names. Exploration plans The company did some preliminary geological evaluations when determining which tracts to bid for and now plans to hire a consulting geologist to do a detailed evaluation of each tract.
“What we’ll do now that we’ve acquired the tracts is … some extensive geology on the areas and (determine) what we might do with them at some point in the future,” Snyder said.
The company is primarily interested in gas plays.
“I understand there’s … a contract on the table for any gas that’s produced that will be sold at prevailing prices, so that certainly is intriguing for us,” Snyder said.
He emphasized how pleased his company was to be entering the Alaska oil and gas business and how welcome it felt in the state.
“We found everybody to be very, very friendly and very to receptive — the attitude seems to be if you do it right and you do it clean we’re more than welcome to have to you up here,” he said.
And Snyder thinks that the new leases provide a good starting point for his company.
“We are certainly delighted that we have our holdings now covering all quadrants of the Cook Inlet — it will give us quite a bit of insight as to the specific areas that we want to focus on in future acquisitions,” he said.
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