Doyon to explore oil, gas reserves

Recent studies point to area as a potential source of natural gas

Posted: Monday, January 25, 2010

FAIRBANKS - Doyon Ltd. will spend the next two months exploring a 200,000-acre swath of land on the Yukon Flats for oil and gas reserves, the regional Native corporation announced.

The project will take place north of Stevens Village, in an area near the trans-Alaska oil pipeline. The land to be explored is owned by Doyon and Dinyee, the village corporation for Stevens Village.

Jim Mery, Doyon's senior vice president of lands and natural resources, said recent studies by the U.S. Geological Survey point to the area as a potential source of natural gas and oil concentrations. Previous exploration efforts by Amoco and Exxon have had encouraging results in other parts of the Yukon Flats basin, but the area near Stevens Village hadn't seriously been considered before, Mery said.

"It's not an area we heretofore thought had promise, but based on the USGS studies, it does," he said.

If seismic tests yield positive results, Mery said, Doyon will explore industry interest in developing the area, both in the Yukon Flats and on other Doyon lands that have shown promise, such as those near Birch Creek.

The Yukon Flats land also is appealing for development because of its location. It's located about 30 miles from the trans-Alaska oil pipeline and could take advantage of that built-in delivery system.

"Infrastructure and access are critical to development in Alaska," Mery said.

Doyon has been active in resource exploration in the Interior in recent years. The Fairbanks-based corporation is among a group of companies in a venture to search for natural gas near Nenana, where Doyon has leased 500,000 acres for potential gas development. Mery said the companies still haven't decided whether to release the results from a $15 million test well that was drilled in the area last summer.

Seismic testing is least disruptive during the winter, so the Yukon Flats surveys will begin Thursday and should be completed by early April, according to Doyon. Data gathering will be done by helicopter and snowmachine.

Howard Taylor, the general manager and secretary of Dinyee, said the seismic tests are expected to provide about 20 jobs to Stevens Village tribal members this winter. Support services will be provided by Arctic Contracting LLC, Doyon Universal Services and Taiga Ventures.

"It's a small village, so that's a real boon to the local economy there," Taylor said.

Taylor said Dinyee and Stevens Village are firmly behind development in the area but extra measures are being taken to make sure the testing is environmentally and culturally appropriate. Harold Stevens, the first chief of Stevens Village, will serve as an adviser during the process.

"Whether it's our land or someone else's land, we're deeply concerned this is done in the most respectful way," he said.

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