Linc Energy plans to drill a natural gas exploration well in Cook Inlet by September.
The Australian independent announced in March that it had acquired the Alaska assets of San Francisco independent GeoPetro. In June, state oil and gas officials approved the transfer of 122,000 acres spread over two onshore blocks on either side of the Cook Inlet.
The acreage includes state and Alaska Mental Health Land Trust leases split between Point MacKenzie on Knik Arm and Granite Point on the west side of Cook Inlet.
“The acquisition of this acreage and the commencement of operations on the ground in Alaska create fantastic opportunities for the company to secure short-term revenue opportunities from its traditional oil and gas prospects, whilst also establishing an immediate ability to pursue further opportunities for underground coal gasification for cleaner power and fuels within the regions significant coal deposits,” Linc Energy Chief Executive Officer Peter Bond said in a prepared statement released on July 14.
Linc formed an Alaska subsidiary in November and became qualified by the state Division of Oil and Gas in May. The company said it is now building an Alaska team.
Under the terms of the deal, GeoPetro gets $1 million now that the leases have been transferred. If Linc begins producing oil or gas from its state leases, GeoPetro would get 75 percent of the proceeds up to $4 million and 10 percent of the proceeds after that.
Well would test TyonekAs a company, Linc is focused on underground coal gasification, a process for developing natural gas resources from shallow coal deposits without mining, but the company plans to start in Alaska by pursuing conventional natural gas targets.
Linc plans to drill the vertical LEA No. 1 well deep enough to test dry natural gas deposits in the middle and lower Tyonek formations, and to depths equivalent to the Hemlock formation, according to GeoPetro. The location of the well will be based on seismic information GeoPetro acquired during the years it owned the prospects.
GeoPetro didn’t drill in Alaska, but the company built a drill pad and an access road for a proposed well at Point MacKenzie. The Frontier Spirit No. 1 well, a prospect formally known as Midnight Sun, would have tested a conventional gas prospect in the middle and lower Tyonek formations, at a depth of about 8,000 feet in an 11,500-acre structure.
Linc also believes its leases overlie some 20 billion tons of coal, a “large percentage” of which is suitable for underground coal gasification, according to the company.