Evergreen secures Matanuska gas drilling rights

Posted: Thursday, September 25, 2003

ANCHORAGE (AP) Evergreen Resources Inc., has obtained subsurface lease rights to 230,000 acres in the Matanuska Susitna Borough area, the company said.

The Denver-based company is exploring for shallow natural gas in the Mat-Su and already had 75,000 acres under lease.

With its latest announcement, the company said it now has a production-size block that could generate commercial quantities of methane.

''To make a coal bed methane play work, you need, in our opinion, a couple hundred thousand acres, and it needs to be contiguous,'' said Evergreen spokesperson John Kelso.

Methane is the main component in natural gas and is captured by drawing off underground water in coal seams.

Evergreen has drilled eight pilot wells on its 75,000-acre prospect in the Mat-Su Borough, and some are producing small quantities of gas.

The company plans to bore five core samples around its new leases before January, Kelso said.

If the core samples are positive, the company would evaluate whether to go forward with new pilot wells in 2004, Kelso said.

Much of the 230,000 acres is located north of Houston and the parcels were made up of 60 noncompetitive individual leases. Evergreen leased 35,000 acres and obtained rights to the other land from nine individuals out-of-state.

Many Mat-Su residents expressed shock and anger during public meetings after learning the land under their homes was under lease. Some have directed anger at their state lawmakers.

Sen. Scott Ogan, R-Palmer, accepted a $40,000-a-year consulting job with Evergreen after he sponsored a bill creating the shallow gas leasing program.

Rep. Vic Kohring, R-Wasilla, sponsored a bill to allow the state to overrule local governments that try to regulate shallow gas operations.

Evergreen has development wells in Las Animas County, Colorado that it believes will continue to produce for up to six years, Kelso said. But the company is considering exploration in Kansas and Alaska.

The company announced Sept. 15 that it bought the working interest in 113,000 acres in eastern Kansas. That same day, it intervened to settle a lawsuit against Alaska that allowed the state Department of Natural Resources to issue leases.

''We're looking now to expand our coal bed methane business model into a new area,'' Kelso said. ''That's either Kansas or Alaska or both.''

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