"It's a basic lease agreement" with Rutter and Wilbanks Corp. of Midland, Texas, said Ken Johns, president and chief executive officer of Ahtna. If there is a discovery and a market for it, Ahtna will get a standard royalty.

"We're going to drill to 7,500 feet, which will be the deepest well stratigraphically ever drilled in the area," Bill Rutter III, a co-owner of the Texas firm, said Feb. 7. "We will be looking at older rocks than previously drilled to."

Forest Oil and Anschutc Exploration, both of Denver, are also investors in the project, each with a right to participate in one-eighth of all future activity. The Texas firm, however, is footing the bill for the initial well, Rutter said.

A discovery at that location "will be insignificant to the world, but significant to Glennallen, and could be significant to Southcentral Alaska," Rutter said. "The upside is we could discover significant reserves for Southcentral Alaska."

The Fairweather Group of Anchorage is handling operations for the Texas firm.

"We will be drilling this well starting at the end of February," said Bill Penrose, a partner in the Fairweather Group. "Just one (well) right now. There wouldn't be time to build more than one this winter."

Fairweather will clear and prepare the drilling location area. The drilling contractor, Nabors Alaska Drilling, will be using rig 129, he said.

Ahtna's Johns said Rutter and Wilbanks is leasing more than 23,000 acres. The lease calls for the company to be productive or pay on a rising scale every year. "They can't just sit on it," Johns said.

The lease agreement also contains language dictating care of the surface area during exploration. "They are very conscious about our subsistence (lifestyle) and caribou migration," Johns said. The Nelchina herd, numbering about 40,000 caribou, winters in the area, Johns said. "We want to do it right. We want to make sure it maximizes benefits to the shareholders and protects the land and subsistence and everything else. This is all written into the lease agreement."

The site for the proposed confirmation well lies about 10 miles west of Glennallen, on acreage that contains a lot of spruce, swamp and permafrost, Johns said.

Exploration interest in the area dates back to the 1960s, when Amoco drilled an offset well about a half mile from the current site, Penrose said. Since then, new seismic information has been acquired, he said. That, in addition to the discovery that a geological high structure was not penetrated by the old Moose Creek No. 1 well, brought renewed interest in the area, he said.

"When they drilled the Moose Creek well there was a minor indication of gas," Penrose said. "Rutter and Wilbanks looked at the seismic (data) and felt there was a probability of a reservoir of gas," and that's what they're looking for.

Ahtna Inc., one of 12 regional Native corporations established under the Alaska Native Claims Settlement Act, has about 1,200 shareholders, most of whom reside in the Copper River region. The firm, headquartered in Glennallen, is committed to providing a broad range of opportunities for its shareholders and preserving their Native culture.