August Message to Shareholders
I hope the summer has been good to you so far. For our shareholders in the Interior, it has been a tough month or so, particularly in the communities of Tanana and Nulato, where they have been battling wildfires close to homes and structures. Unfortunately, the state is on track to break the previous record for the number of acres burned. We have worked closely with Tanana Chiefs Conference to respond to the fires and assist those displaced by evacuations. Our thoughts are with the shareholders and other community members impacted by these recent events, especially those evacuated.
I’m excited to announce that Doyon, Limited and Doyon Drilling, Inc. (DDI) recently entered a deal with Caelus Energy for work on the North Slope. This new contract with Caelus ensures that all seven of DDI’s rigs will work in our fiscal year 2016! The work, which will utilize DDI’s Arctic Fox drilling rig, will take place in the Smith Bay field during the winter exploration season. As part of the transaction, Doyon, Limited has acquired an overriding royalty interest and carried working interest in the Smith Bay leases with the potential for significant future financial benefits.
In the summer of 2016, Doyon will continue our oil and gas exploration program in the Nenana/Minto Flats Basin. The encouraging results from the Nunivak #2 well drilled in 2013 and the 3D seismic program from fall 2014 led us to decide to drill a third well in the area. Following the completion of the Caelus contract on the North Slope, DDI will transport the Arctic Fox to Nenana to begin the drilling program. The opportunity to create a new industry in Interior Alaska is truly exciting, especially when it holds the promise of a less expensive, locally produced and cleaner-burning fuel for Interior residents. More information about timing and any employment opportunities will be shared in future newsletter articles.
Doyon continues fiscal year 2015 with strong financial performance, and we expect to close out the year well ahead of our budget set in August 2014. Later this month, we expect the board to approve the 2016 operating and capital budgets, along with the goals and direction established at the May planning session.
In closing, I wish your children much luck for a successful school year. As always, I appreciate your continued support of Doyon.
President & CEO