|
Merlin looking north Louisiana-based independent looks to Alaska for new opportunities; focused mainly on natural gas plays Patricia Jones Petroleum News Contributing Writer
Louisiana-based Merlin Oil & Gas is one of 19 independents the state of Alaska is working to woo north, according to Tom Irwin, commissioner of the Alaska Department of Natural Resources.
And if any of the other independent operators are as enthusiastic as Mark Miller, president and CEO of Merlin, Irwin’s job should go smoothly.
“I’m so excited to have a chance to come to your state,” Miller told Petroleum News in a telephone interview on March 17. “We’re interested in all opportunities for small companies like ourselves, not just shallow gas but Cook Inlet … I think the slope is a little beyond where I can go as a small company.”
Irwin mentioned the state’s interest in encouraging independent operators during a speech before the Alaska Miners Association in Fairbanks on March 15. “We have 19 independents seriously talking to us,” Irwin said. “We need a gas line to give them access to markets.”
Access to the oil pipeline and resolution of land issues in Alaska would also help lure additional investment, he said in an interview following his speech. Merlin has been looking at Alaska Irwin connected with Merlin’s president at a conference in New Orleans last fall, the commissioner said.
But the head of the independent exploration and production company has considered investing in Alaska for some time.
Miller first came to Alaska about eight years ago, he said, with a friend who was then working for Exxon during pipeline renegotiations. His trip included visits to Prudhoe Bay as well as a number of communities around the state. “I fell in love with it.”
He has since returned to Alaska several times, including one trip that included purchase of some recreational land on Trapper Lake, a few miles west of the Parks Highway, about midway between Talkeetna and Willow.
“That just further cements my belief in the state,” Miller said.
Recent interest includes meetings in Juneau with the commissioner and the governor, whom he described as “obviously pro-business.”
“We talked about opportunities for shallow gas, with the incentives being put forth to bring small companies into the fold,” Miller said.
Alaska’s oil and gas exploration structure offers economic incentives that are “strong” for small companies, he said. “There are real opportunities to go drill wells.” CBM, shallow gas interest Miller also attended a public meeting in Anchor Point on coalbed methane development. Controversy in the community surrounding the development new to Alaska hasn’t scared off Miller: “I was trying to understand their concerns.”
Misunderstanding about legalities surrounding mineral rights and worries about development approaches were issues expressed during that meeting. “Their main concern was that a company would come in and drill next to their home. It’s a concern that’s valid, but not realistic,” Miller said. “It’s not the classical approach to coalbed methane development.”
The atmosphere at the public meeting contained “a lot less tension and abrasiveness” than he expected, Miller said. “I saw it, I understand it and I’m willing to go back and work with the community.”
In fact, Miller’s company has experience developing natural resources next to and within populated areas. Currently Merlin Oil & Gas is producing some 15 million cubic feet per day of gas and approximately 200 barrels of oil a day from four wells drilled just outside the city limits of New Orleans, he said.
Royalty payments go to about 44,000 entities, Miller said. “The community benefits from the leasing, from money spent on exploration and they actually participate in royalties.”
Exploring for that resource involved coordination of 3-D seismic work through several neighborhoods, he added, a time-consuming task. “Our niche is to work in developed areas, to work with a community hand in hand.” Focused on gas Primarily focused on gas exploration, Merlin has also drilled in coastal, swampy areas, providing experience that could be transferred to low-impact areas in Alaska, Miller said. “We have a lot of very delicate marshes here and we have shown that we can operate in the coastal environment,” he said. “Some people don’t like to operate in those areas, but that part of working in Alaska is something we can cope with.”
In addition, Merlin has drilled some offshore wells, the deepest in about 100 feet of water, he said.
The privately held company formed in 1986, Miller said. He’s planning to attend lease sales in Alaska this May, and said he was going to “spread the word amongst other small companies about the tantalizing opportunities … I hope to be bringing a group back for the lease sale.”
| 