Doyon Announces $37 Million in New Projects
Fairbanks - Doyon, Limited announced plans Monday for $37 million dollars in new oil and gas exploration projects in the Nenana Basin and the Yukon Flats. Doyon Limited’s board of directors sanctioned two drilling projects and a new round of seismic work.
The Interior Regional Native Corporation’s President and CEO Aaron Schutt says the drilling program could bring 80 to 100 jobs to the region.Seismic work may provide up to 30 jobs in the region this winter. If the projects are successful, Schutt says Interior Alaska may see hundreds of long term jobs. “Even in the short term the economic benefits of a 35 to 40 million dollar project in interior Alaska those befits largely stay here," he says. "We are an oil and gas contractor so we hope to put our people to work there a lot of people that support exploration projects in the interior are local residents, and we hope to see that as well, so it will have an economic impact this coming year.”
The corporation will convert 400,000 acres in the Nenana Basin currently under state license to seven-year state leases. They will also begin the permitting process to drill a new deep well in the Basin. And they’ll conduct a new round of seismic testing on Doyon and village corporation lands in the Yukon Flats. Schutt says the work would not be possible without incentives and a change in the state’s oil production tax regime that passed in the legislature earlier this year.“We understand the chances of success in any one well are fairly small," says Schutt. "This allows us to take a longer term approach.Hopefully we get lucky in the first well but if we don’t, this type of partnership with the state will allow us to examine the results of that well and possibly drill another well.”
Doyon will seek permits to drill three wells, but the corporation currently only plans to drill one. Fairbanks Representative Steve Thompson sponsored the new legislation. He says this was the kind of result he was hoping for when he introduced the bill. “You needed to make sure you had the drilling tax credits," explains the Representative. "You had to have the production tax for a company to be able to regain and recover the cost to bring a successful well to production. So, to be able to do that was what this was all about and we’re excited about this announcement.” Both drilling and Seismic work are scheduled to begin in late January and continue through early April, if the permitting process is successful.