Independent makes aggressive Alaska play

New player True North Energy acquires nearly 33,000 acres of Cook Inlet, North Slope leases from Donkel, Allen, Cade, others

By Rose Ragsdale

Petroleum News

Fourteen months ago, True North Energy Corp. did not exist.

Three months ago, the publicly traded junior energy company had a different name and mission.

Today, True North owns 33,000 acres of Cook Inlet and North Slope oil and gas leases and has embarked on an aggressive strategy of Alaska exploration aimed at reaping bold dividends for its shareholders, chief among them 30-year-old energy investor Massimiliano Pozzoni.

Pozzoni acquired the startup in January and changed its name in March. Originally a print brokerage and print business incorporated in Nevada in April 2005, Ameriprint International Ltd. is now Houston, Texas-based True North Energy. The oil and gas independent is traded on the over-the-counter exchange under the stock symbol TNEN.

True North’s goal is to secure and develop a vast portfolio of oil and gas properties in America’s Last Energy Frontier – Alaska, according to Pozzoni. The strategy also calls for joining others in low-risk drilling ventures in Louisiana, Texas and Oklahoma.

Since April, True North has purchased nearly 23,000 acres in onshore and offshore leases on the western side of Cook Inlet as well as 10,000 acres of leases onshore and offshore near the North Slope’s Prudhoe Bay oil field.

True North raised $1 million in capital with a private placement in May. The company also joined Bayou City Exploration in a venture announced June 22 to explore for gas by drilling three wells in Texas and Louisiana.

In Alaska, True North purchased 22,917 acres in Cook Inlet leases. These include its Harriet Point prospect, 17,166 acres in contiguous parcels covering onshore and offshore areas along the western coastline of Cook Inlet’s Redoubt Bay.

The company said a recent technical assessment showed the area had potential recoverable oil of 180 million to 700 million barrels. A shore-based well is required to test the prospect at a drilling depth of 4,600 feet, True North added.

The Cook Inlet acreage also includes the North and South Beluga prospects totaling 5,811 acres. These tracts are adjacent to the Beluga River Gas Field owned by Chevron, ConocoPhillips and Municipal Light & Power of Anchorage. A mature field that has produced more than 900 billion cubic feet of natural gas, it has 400 Bcf in remaining gas reserves. True North hopes to prove additional gas reserves on its acreage.

The Cook Inlet leases were purchased from individuals, including Dan Donkel and Samuel Cade, for cash, overriding royalty interests and other considerations. They were as follows: ADL 390567 (Donkel, Mehaffey, Monte Allen); 390572 (Monte Allen); 390722 (Donkel, Newman, Cade, Hodgden); 390723 (Donkel, Newman, Cade, Hodgden); 390745 (Cade, Donkel).

On the North Slope, True North said it purchased four 2,500-acre parcels (leases) onshore and offshore.

They are adjacent to the BP-operated Duck Island production unit. Only four of the Duck Island leases are shown in the adjacent map from True North — those are the Exxon-operated leases in which Exxon owns either a one-third or a one-fourth interest (depending on the lease) with partners Unocal (now Chevron), and ConocoPhillips.

True North’s acreage is about 10 miles east of the Prudhoe Bay production unit. Those four leases have not been issued to the individuals that sold them to True North because they were won at a recent state lease sale.

The leases purchased by True North are as follows: ADL 389208 (Buck 80%, Micallef 15%, Lejeune 5%); 389932 (Donkel 50%, Mehaffey 50%); 390087 (Monte Allen); 390383 (Barr, Donkel, Kasper, Bolt).

Newly appointed True North President John Folnovic told Petroleum News June 21, “We try to aggregate individual leases into a favorable position.

Folonovic, 50, signed on as True North’s chief executive officer June 1. A 25-year veteran of the oil patch of northwestern Canada, he has served since 2003 as president and CEO of Petrodell Energy, a private oil and gas independent based in Calgary, Alberta.

Before that, Folnovic worked as a consultant and as acting CEO and director of Sunmatrix Petroleum Corp. From 1998 to 2000, he was a vice president and chief operating officer of Dominion Energy Canada Ltd.

A chemical engineer by training, Folnovic said he earned his reputation while managing heavy oil assets for BP Canada and Amoco Canada.

“I’ve functioned in this kind of sensitive environment before in British Columbia and northern Canada,” said Folnovic, who is planning a trip north to Alaska this summer.

But True North’s buying spree may be over for a while.

“There is a lot of technical work to be done now and probably some seismic work,” said Folnovic. “We will try to understand what we already have. We’ll probably bring in partners.”

True North also hopes to showcase its Alaska projects at a popular oil and gas conference in Houston in August, Folnovic said. He has already visited some of the Houston-based companies with activities in Alaska, he said.

Eventually, “we would like to strengthen our position in Cook Inlet. We look to make more acquisitions,” he added.