Published January 2017
Our industry-leading safety record sets us apart from other businesses and has allowed us to expand in this down economy. This culture starts with our Board of Directors, extends down through our incredible management team, and ends with each and every one of you. Thank you for embracing the traditional Ahtna way of “being prepared,” which puts safety at the forefront of everything we do.
After much consultation and testing calls, I advised our Board chairman and our president last month that we should suspend activities related to the Tolsona well. Suspension means that personnel, equipment and materials will be demobilized from the site. We’ll spend the next few months deciding if the well should be plugged and abandoned.
These results are very disappointing, as we have all hoped and prayed for commercial success. However, we should be proud of what this project delivered:
- Outstanding safety record.
- Shareholder hire and development.
- Penetrating and evaluating the targeted zone and qualifying for state credits.
- Obtaining a large non-8(a) revenue base for AEI to help it obtain additional sole-source work.
- Learning a great deal about the gas prospects on Ahtna lands outside of Tolsona. There was a tremendous amount of data analysis and correlations done between various wells.
- Increasing awareness from the industry that Ahtna is open for business.
I want to personally thank the shareholder-owners who have safely worked so hard – EVERY DAY– during this effort. I also would like to thank the Board and all the management personnel who have invested so much time, talent and treasury into Tolsona.
Last quarter’s issue of the Kanas included an article on a new program Ahtna is exploring called “carbon offsetting.” After meeting with other Alaska Native corporations and carbon-project developers, our Board of Directors told us to proceed with the project so long as our inventory is more than 4 million tons of carbon. It turns out that our carbon stocks inventory is at 7.5 million tons, which is nearly twice as much carbon as we expected. Moreover, BP is committed to purchasing 6 million tons, and may be interested in purchasing the remaining volume. That means we already have a buyer lined up for almost all of the credits we are likely to be allowed to sell. This month begins the initial six-month reporting and verification-process period.
I’m so proud of the great work by our shareholder-owners who have advanced this project, and the hard work of the Ahtna support team including HR, Shareholder Development, Legal and Finance. This project is a game changer that will benefit Ahtna shareholder-owners for years to come.
We are committed to protecting the money this project will generate. The entire Board and management team recognize your concerns that shareholder-owners get lasting value from this project, and we will work to find ways to make that possible. That means this revenue cannot leave the company as quickly as it comes in: we will structure receipt of the revenue for long-term prosperity.
If our 2017 priorities sound similar to 2016, it’s because they are. Our Board provides the framework for what they want management to focus on and – as our chairman stated earlier – our priorities focus on delivering for you – our owners:
- Shareholder-owner hire and development
- Ahtna region business and profitability
Tourism has become a strategic focus for our Board. Ahtna has some of the most beautiful land in the world and we want to utilize our land and create jobs for our shareholder-owners by developing this renewable resource. We are actively studying options for an Ahtna resort complex in the Denali area. A conceptual layout is being developed. We will update you as the project moves forward. It has been an amazing and humbling experience to visit with shareholder-owners during the gatherings in Anchorage, Fairbanks and Glennallen this past year. I’ve learned so much about you and the culture and traditional values of the Ahtna. Thank you.
I hope your holidays have been merry and happy new year to you all.