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THE INDEPENDENTS 2003: Clearflame aims to explore Susitna Under leadership of Dodson, work commitment for exploration license is $2.5 million Kay Cashman Petroleum News
Clearflame Resources, a Denver, Colo.-based limited liability corporation formed in February, was awarded a 478,584.25 acre Susitna basin exploration license by the state of Alaska Sept. 25. (See map on page 49.) There were no competitive bids for the acreage.
The license was 21,255.75 acres shy of the 499,840 acres Clearflame requested. The acreage was excluded because Forest Oil holds shallow gas leases within Clearflame’s requested license area. The state said if any of the shallow gas leases expired during the term of the license, that acreage may be included in the license.
Formed by a group of individuals who had been in executive positions through late 2002 with Denver-based Fidelity Exploration and Production Co., a subsidiary of MDU Resources Group Inc. (NYSE: MDU), Clearflame snagged Jim Dodson to head up its Alaska venture. Dodson was an executive vice president with Andex Resources and had been instrumental in putting together more than 500,000 gas-prone acres for Andex Resources in the Nenana basin in Interior Alaska. (See related story on page 74.)
Susitna target is gas “Right now Clearflame is focusing on Alaska,” Dodson told Petroleum News June 26, “but we have an acreage position in Wyoming (and) will be working other areas, as well.”
The company, he said, will be targeting natural gas in the Susitna exploration license area. If Clearflame finds gas, it will look at building a pipeline to connect to Enstar’s system, “14 miles from the edge of our block,” for transport to the Anchorage market.
Surrounds Forest’s license area Clearflame’s license area is in Southcentral Alaska, west of the Parks Highway and includes only lands for which the state owns the mineral estate. It surrounds Forest Oil’s exploration license area on all but the northeast corner, and extends as much as 30 miles to the west.
Forest’s license No. 1 is for 386,206.63 acres and its license No. 2 is for 471,474.23 acres.
Communities in the area include Trapper Creek, Talkeetna, Willow and Skwentna.
Clearflame and Forest will pay licensing fees of $1 per acre.
There is no rental fee for exploration licenses and no up-front payment to the state, as is the case with conventional oil and gas leasing. Instead, money goes into exploration and licenses are granted based on the state’s approval of work commitments by the licensees.
Clearflame’s work commitment for its license, which has a primary term of seven years, is $2.5 million.
Once the required work commitment has been completed, Clearflame may convert all or a portion of each license area into conventional oil and gas leases, with a rental of $3 per acre per year. Conversion leases will have a primary term of seven years, the state said.
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