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Vol. 15, No. 46 Week of November 14, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

The Explorers 2010: Exploration license holders

The State of Alaska began issuing exploration licenses in 1998 as a way to encourage drilling in prospective areas of the state not covered by lease sales. Since then, explorers have drilled in two Interior basins, but neither effort has yet led to sustained development. Still, companies continue to apply for the right to drill in frontier basins.

For years, Rutter and Wilbanks Corp. drilled natural gas wells on a 44,576-acre license, some of it eventually converted to regular leases, in the Copper River basin near Glennallen, but the drilling results ultimately proved disappointing. A joint venture lead by Rampart Energy and Doyon Ltd. drilled for natural gas in the Nenana basin in 2009, on a license area covering nearly 483,000 acres. That joint venture is considering how to proceed. A newcomer, Cook Inlet Energy, inherited a 471,474-acre license in the Susitna basin when it bought the assets of Pacific Energy Alaska, but as of yet has not announced any plans to drill in the natural gas prone area northwest of Wasilla.

The licensing process isnít quick and occasionally gets delayed by public opposition. In 2005, the state denied Holitna Energy Co. LLCís application for a license over 26,779 acres in the natural gas prone Holitna basin, but overturned the ruling in December 2009. That application is still pending, as is Usibelli Coal Mine Inc.ís 2004 application to explore for natural gas and coalbed methane on 208,630 acres in the Healy basin, near the companyís long-time coal mining operations. The State recently approved that license, but is reviewing the decision after receiving comments in opposition to the plan.

In 2008, two independent explorers proposed new exploration licenses. Berkeley GeoImaging LLC, of Oakland, Calif., requested a 72,443-acre license to explore for oil in the Crooked Creek-Circle basin in Interior Alaska east of the community of Central and south of the community of Circle. LAPP Resources Inc. requested a natural gas exploration license covering 21,080 acres in the Houston-Willow basin, an area along the southern stretch of the Parks Highway that has seen decades of interest. Both of those proposals are currently under review by the Alaska Division of Oil and Gas.

In 2010, the Alaska Mental Health Land Trust announced that it would accept exploration license application for underground coal gasification over 190,000 on three boroughs.



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