The oil company that plans to buy BP’s oilfield assets in Alaska will also hunt for oil and natural gas on lands owned by a regional Alaska Native corporation in the Interior, officials said Monday.
Doyon has explored its backyard for oil and gas for several years but has not made discoveries that have led to commercial development.
Now, Hilcorp will take over the search in a 1.6-million-acre area in the Yukon Flats north of Fairbanks, according to a five-year deal signed between the companies, said Aaron Schutt, president of Doyon.
Hilcorp plans to conduct an airborne gravity survey this summer to help it assess the geology of subsurface lands in the Flats, Schutt said in a news conference.
The program could cost millions of dollars, and will cover an area that has seen limited exploration, he said. The survey will have “no ground activity and no land impacts,” according to a summary of the agreement.
If successful, the airborne survey could be followed by a more extensive hunt for oil and gas using seismic technology, and possibly exploration drilling, Schutt said.
“Doyon has been actively exploring for oil and gas resources in our region for over a decade," Schutt said in a statement. “We’ve barely scratched the surface.”
David Wilkins, senior vice president with Hilcorp Alaska said in the statement the “partnership with Doyon represents great opportunity for their shareholders and the state."
Schutt said the largest benefits to Doyon could come if Hilcorp produces oil or natural gas, which would lead to royalty payments to Doyon.
Headquartered in Fairbanks, Doyon is the largest private landholder in Alaska. It represents more than 20,000 shareholders.
Based in Houston, Texas, Hilcorp in August announced plans to acquire BP’s Alaska assets for $5.6 billion, a blockbuster deal that could receive regulatory permission sometime next year. Hilcorp is also the dominant oil and gas producer in the small Cook Inlet region near Anchorage, and in 2017 acquired leases to explore in federal waters there.