Company seeks license to explore for gas, oil in Nenana Basin

Posted: Wednesday, May 23, 2001

FAIRBANKS (AP) -- An unidentified company is asking the state for an oil and gas exploration license in the Nenana Basin in what is the first significant interest in the area in two decades.

''I believe this is going to be a conventional gas play they are looking for,'' said James Hansen, leasing officer with the Alaska Division of Oil and Gas. The identity of the applicant is confidential at this point, Hansen said, because the state must solicit competing proposals before issuing a license.

''Whoever agrees to spend the most money for exploration would get the license,'' he said.

The request is for 500,000 acres somewhere in the state's 1.4-million-acre Nenana Basin Study Area, which goes north beyond Old Minto and south to just past the Denali Borough's northern border.

Potential for natural gas in the sedimentary basin around Nenana is unknown. The state has not explored the area, Hansen said, and the scant private exploration occurred about 20 years ago.

The area has also drawn recent interest for its possible reserves of coal bed methane, shallow gas pockets that are sometimes associated with coal deposits.

The state last week awarded 96 coal bed methane leases in the Interior. The leases are small, no more than 5,760 acres each, and no single lessee can hold more than 46,000 acres.

Some leases are for land along the Parks Highway near Nenana. Geologists say that the Healy coal beds might extend that far north.

But the area around Big Delta has drawn more serious interest for coal bed methane. Geologists say there is coal in the region around Jarvis Creek and the Alaska Range.

An Anchorage firm, Lapp Resources Inc., is planning to conduct the Big Delta drilling as a joint venture with individual leaseholders. Wells could eventually serve Delta Junction, the Pogo gold mine, and Fairbanks, said company president Dave Lappi.

The only public opposition to coal bed methane leases came from the Talkeetna area.

''There was one basically right in top of Talkeetna,'' said Pirtle Bates, DNR resource officer. A decision on whether to award that lease has not been made, Bates said.

Coal bed methane leaseholders must pay the state an annual fee of 50 cents an acre to keep the claims active. The state receives royalties if the wells produce.



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