June Message to Shareholders
Alaska’s economy continues to be the headline in the news cycles. Despite the grim reality of oil prices throughout Doyon’s fiscal year 2016, our financial performance has been relatively strong in the first two quarters. However, due to lower levels of activity on the North Slope, we expect the last two quarters of the fiscal year to be weaker. Regardless of the outlook, we expect to finish our fiscal year 2016 with financial performance second in company history only to 2015.
Shareholder employment for fiscal year 2016 also is not as strong as it was in 2015. We have had fewer shareholder employees on the North Slope due to significantly less work for several of our oil field services companies. However, we’ve been able to keep a large number of people working while other North Slope contractors have had large layoffs.
There are bright prospects on the horizon for Doyon. We will drill a well, Toghotthele #1, in the Nenana Basin this summer. The experts tell us that the new well has a one in two chance of finding a commercial natural gas resource and a one in four chance for oil. If Toghotthele #1 finds a commercial resource, the estimate for recoverable oil is 70 million barrels, and 200 billion cubic feet for natural gas, which could mean plenty of gas for Fairbanks. This past winter, we completed two new miles of road and the drilling pad for the well. We also moved Camp Orie, formerly Camp Denali, to the site located outside of Nenana. Very soon, the Arctic Fox drill rig will be barged across the Nenana River to the drill pad. We expect to begin drilling in the month of June; so keep your fingers crossed.
Finally, in May, we celebrated the many Doyon shareholders who graduated from high school or college this year. I want to personally congratulate them for their hard work and dedication, and I look forward to their continued success. I had the privilege of speaking at the University of Alaska Fairbanks’ (UAF) commencement ceremony. I was able to see our second Chief, Trimble Gilbert, and the Hannah Paul Solomon Shareholder of the Year recipient, Elizabeth Fleagle, receive honorary doctorates from UAF. Both are well deserving of the recognition.
Thank you for your continued support of Doyon and its employees.
Aaron M. Schutt
President and CEO