LAPP Resources waits for shallow gas leases

Applications for prospects in the Matanuska Valley, at Delta Junction and near Homer submitted about a year ago

Alan Bailey

PNA Contributing Writer

Dave Lappi, president of LAPP Resources Inc., told PNA in mid-March that he is waiting for the Alaska Division of Oil and Gas to process some lease applications for shallow gas exploration and development.Prospects in the Matanuska Valley, at Delta Junction and near Homer all require leases. Lappi submitted the lease applications about a year ago, but shallow gas leasing sits at a low priority in the Division of Oil and Gas’s backlog of work.

Lappi has been pursuing coalbed gas development in the Matanuska Valley for several years, and had been working with an Australian company called GRI Inc. to develop the Houston coalbed gas field. As reported by PNA in January 1999, GRI pulled out of the Houston field.

The leases for the Houston field have lapsed through lack of activity.

A number of companies have now applied for shallow gas leases in the Matanuska Valley. Lappi is working with Evergreen Resources Inc., a specialist coalbed gas company based in Denver, Colo. “Anything that they need done as far as the shallow gas lease applications in Alaska we’re handling for them,” Lappi said. He also expects to be involved in drilling operations with Evergreen.

LAPP Resources has also farmed into a natural gas block near Delta Junction. “We’re working fairly hard on that,” Lappi said. The so-called Delta Natural Gas Project could produce both conventional and coalbed natural gas for consumption in the Fairbanks and Delta Junction areas.

The local demand for natural gas would seem to assure the economic success of the Delta project.

Lappi is also monitoring the plans for exporting gas from the North Slope — the proposed highway route for the gas pipeline passes right next to the Delta Junction block. The proximity of the pipeline would present some interesting possibilities for integrating Delta Junction gas production into the pipeline system.

LAPP Resources has also applied for shallow gas leases in the Homer area, with the eventual aim of supplying natural gas for the Homer area residents. “Unocal, Enstar and Homer Electric are talking about building a pipeline down that way,” Lappi said.

For the time being, Lappi continues to wait for the Division of Oil and Gas to grant the leases. “These projects are long-term things,” he said. “A year’s delay in granting leases affects you, but you have to look at it with a long-term view.”