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Andex close to Nenana deal, gas could go to Anchorage
Kay Cashman PNA Publisher
Jim Dodson, executive vice president of Andex Resources LLC of Houston, told PNA that his firm is “very close to a deal with Doyon” to explore and develop the oil and gas resources of approximately 38,000 acres in the Nenana sedimentary basin in Interior Alaska.
The privately owned independent is also working with the state for an exploration license in the basin. Dodson said Doyon Ltd. was instrumental in getting Andex interested in what geologists view as a gas-prone area.
“The Andex license application is for several hundred thousand acres in the basin. Our land is in a fairly strategic location in the deepest part of the basin. We’re an island within state land,” Doyon Vice President of Lands and Natural Resources Jim Mery told PNA.
“Doyon has been a tremendous source of information for us. We couldn’t have put together the picture we have — the picture that made us go after this deal — without Doyon,” he said.
Two right-of-ways to Anchorage The Nenana basin, which Doyon Ltd. documents said could hold reserves “on the order of 250 million barrels of recoverable oil and 250 Bcf to 1 Tcf of recoverable gas,” was explored by ARCO Alaska in the early 1980s. ARCO drilled a well in the basin in 1984 but dropped its plans for further exploration when oil prices collapsed, Mery said.
It has enough gas, Dodson believes, to meet market demands for Fairbanks and possibly Anchorage: “We see a home heating market in Fairbanks and an electric generation market. We also see a market for supplanting diesel and other fuels to Interior mines. It’s a 30 million to 50 million cubic feet a day market (for natural gas) in the Interior. …
“If we found a significant gas discovery up there we could seriously look at supplying Anchorage,” Dodson added.
“By Alaska standards the Nenana basin is not that far from Anchorage. … We’re south of the Brooks Range and there are two rights of way that could be used for a pipeline between the basin and Anchorage — the highway and the railroad.”
Seismic winter of 2002-2003 Andex’s work commitment is confidential, Dodson said. “There won’t be any seismic or geophysical work this winter. We expect to shoot our first seismic in the winter of 2002-2003.”
Andex is a good choice for development in the basin, Mery said. Mark Myers, director of the state Division of Oil and Gas, agreed with him.
Both men pointed to the fact that the company is well-funded, involved with other projects in Alaska and looking to get even more involved in the state. (See articles in this issue about Netricity and the Slugger unit.)
“We have been working with them for over a year and gotten to know them very well. A lot of them are old Shell Oil people. … Andex’s president, Ernie LaFleur, was head of Alaska exploration for Shell. I am very impressed with their geology staff,” Mery said.
Native issues Andex appears sensitive to the Native issues that surround any development in the Nenana basin, Mery said.
"While we at Doyon are supportive of oil and gas in this area, we are still very committed to making sure that the state in its best interest finding process for Andex's exploration license has all the information in front of it to make sure that the appropriate mitigation measures can be taken to avoid negative impacts on the area. ...
Mery said there are a "number of youth cultural camps and other educational activities centered out of old Minto village on the Tanana River, as well as important hunting, trapping and fishing that takes place on numerous lakes in the Minto Flats, all of which would be in the general area of the possible exploration and would have to be taken into consideration.
Alaska office a possibility The focus of Andex’s exploration will be gas, Dodson said.
“When industry explored the basin in the early ‘80s, their focus was oil but they knew it was a gas-prone basin and thought there was also a good shot at oil. Andex’s focus is gas. We’d be happy if we found oil, but our focus is traditional natural gas,” he said.
An Alaska office is something “we may have one of these days, depending how big our business in Alaska gets,” Dodson said.
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