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Providing coverage of Alaska and northern Canada's oil and gas industry
May 2008

Vol. 13, No. 21 Week of May 25, 2008

Fowler gets drilling permit for Kircher

Alan Bailey

Petroleum News

On May 14 the Alaska Oil and Gas Conservation Commission issued a drilling permit for the Kircher No. 1 well to Fowler Oil & Gas Corp. The company plans to drill the well to test for coalbed methane in area of forest and farmland between Palmer and Wasilla in Alaska’s Matanuska-Susitna Valley.

The company did not respond to calls from Petroleum News for information about the status of the drilling program following the permit approval but has issued a press release saying that it intends to have completed the drilling and commenced production by the fall of 2008.

“The Kircher No. 1 is the first step of Fowler Oil & Gas’s corporate mission to contribute to a ‘bright’ future for Alaska residents,” said company CEO Bob Fowler. “We want to create a new industry for Alaska that produces an abundance of clean fuel from Alaska’s vast coal fields, while at the same time being eco-friendly — one that also reduces fuel and power costs, creates local jobs, creates a new tax base and contributes to the future prosperity and wellbeing of all Alaska residents.”

On Oct. 1 the Matanuska-Susitna Borough approved a conditional use permit for the Kircher well and in late February AOGCC approved Fowler Oil & Gas’ requests for waivers from some state regulations for blowout protection, well spacing and hydrogen sulfide detection equipment.

Past controversy

Coalbed methane has in the past provoked great controversy in the Matanuska-Susitna Borough because of concerns about industry access to privately owned surface land to drill large numbers of wells and about the possibility of water produced from the coalbed methane production contaminating well water used by local residents.

However, the Kircher well will be located on private homestead land, where the landowner owns both surface and sub-surface rights. And the drilling will use revolutionary new technology that involves the use of multiple horizontal wells that thread their way through coal seams from a single 3,500-foot vertical well; produced water will be pumped from inside the vertical well into a sandstone reservoir below the level of the coal seams, thus eliminating the possibility of the produced water entering the water table.

The small building that will house the wellhead production equipment will be disguised to look like a colony barn. It will be painted to blend with the landscape and will have no exterior lighting. Gas production will not require compressors — an underground pipeline will transport the methane gas to an existing Enstar gas line about a half-mile away.

Formed 2005

Fowler, a native of Palmer, formed Fowler Oil & Gas in 2005.

However, since February 2008 there has been speculation regarding the nature of the relationship between Fowler Oil & Gas and New York-based company Native American Energy Group. Both companies share some staff. NAEG reported in February that it was unable to find sufficient capital to fund operation of its drilling rigs and the Securities and Exchange Commission has been investigating a number of companies, including NAEG, for share trading irregularities.

On Feb. 1 veteran geologist Arlen Ehm resigned as president of Fowler Oil & Gas, saying that he had not been paid in full for his services.

In a statement dated March 19 Fowler said that NAEG had not been involved in the permitting of Fowler Oil & Gas’ Alaska operations.

“Fowler Oil & Gas formed a strategic relationship with NAEG to provide development support services,” Fowler said. “While we sympathize with NAEG and the issues they are trying to address and solve, our company is not affected by the recent action taken by the SEC against NAEG and the other 25 companies. We continue with our plan for drilling for CBM gas in the Matanuska Valley. … NAEG’s SEC matter does not affect the validity of the Fowler Oil & Gas permits, nor its efforts to bring a new energy resource to Alaska.”

Fowler also issued a statement in response to Ehm’s resignation.

“Fowler Oil & Gas always strives to treat its employees and contractors fairly and especially upon termination of a relationship,” Fowler said. “The Fowler family has maintained an impeccable reputation in Alaska over the last 50 years and will continue to do so in the future.”






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