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Pioneer Oil eyes CBM development in Alaska
Kay Cashman Petroleum News Publisher & Managing Editor
A May 19 state lease sale for Alaska’s Cook Inlet Basin drew winning bids of more than $2.7 million, as well as a major new player, Pioneer Oil Co. of Lawrenceville, Ill. (See related page 1 story.) The independent submitted high bids totaling $793,152 on 27 tracts in primarily two onshore lease blocks — one west of Knik Arm, across from Anchorage, from north of Point MacKenzie to southwest of Wasilla, and the other on the west side of Cook Inlet, inland from Trading Bay and west of Aurora’s Nikolai Creek gas field.
Pioneer founder and president, Don Jones, a fourth-generation oilman who plans to visit Alaska for the first time in June, said his company was intrigued with the thickness of the coal seams in Alaska.
“We’ve been looking in the continental U.S. for the biggest reserves of natural gas … and it became apparent Alaska was an oasis of natural gas in several different formations,” he told Petroleum News in an interview by phone following the sale.
“We took the leases for coalbed methane. Our intention is to explore and then exploit (produce) them.”
Jones became interested in Alaska after a presentation from John Mackey, a consulting geologist his company frequently uses to find new prospective conventional and unconventional gas properties. Mackey, who is based in Bloomington, Ind., recently spent time in Alaska, researching the geology.
“I was amazed by the natural resources in Alaska. … There are tremendous gas reserves up there; not only where we took leases but farther north,” Jones said.
Pioneer Oil has “worked with coals in Indiana, Illinois and Kentucky where you might have 35-40 feet of combined thickness. … At 3,000 feet in Alaska you have 400 feet combined footage of coal. … The farther north you go, the thicker they get. … And there is definitely a market for the gas up there,” Jones said.
“I feel Alaska has been overlooked by the producers here in the continental U.S. … I feel like we’re just the first of many to come.” Not looking at heavily populated areas When asked about Evergreen Resources, which has been beset with political and some permitting problems as a result of a deluge of complaints from private landowners in Southcentral Alaska, Jones responded, “I thought it was most unfortunate for Alaska that Evergreen would pick an area that was heavily populated, especially when it appeared they could do the same thing in less populated areas. We took our leases away from populated areas.”
Jones said he intends to bring his technology, integrity and sensitivity to the environment to Alaska.
“We hope to be welcomed by the locals there. We’ll do everything aboveboard, like we do down here.” Coming to Alaska in June Jones was leaving for Africa the day after the Cook Inlet lease sale, but he intends to visit Alaska after he returns on June 6. He estimates it will be 2005 before Pioneer Oil drills the first hole on its Alaska leases.
Pioneer Oil, an ‘S’ corporation, operates about 800 wells in the United States. According to company literature Roger Meier, the general manager of Pioneer Oil’s sister company, Franklin Well Services, has supervised drilling operations on Alaska’s North Slope while working for other service companies.
In addition to moving into Alaska, Pioneer Oil is hoping to expand into the oil business in the West African States and into Nevada where the company is looking at a conventional gas play.
Mark Myers, director of the Alaska Division of Oil and Gas, said he doesn’t know very much about Pioneer Oil, “other that they are a company out of Illinois, and they operate several hundred wells, so they are an experienced oil and gas operator.”
Myers said the state is pleased a new independent is coming into Alaska.
The areas where Pioneer Oil bid are “dominantly gas prone,” he said.
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