On February 6, 1998, about 1615 Alaska standard time, a wheel equipped Piper PA-31-350 airplane, N7678L, operating as a 14 CFR Part 135 on-demand air taxi flight by Larry's Flying Service, sustained substantial damage during a forced landing on a snow and ice covered shoreline about 7 miles west of Nome, Alaska. The airline transport certificated pilot, and the nine passengers aboard, reported no injuries. The flight originated at Nome about 1115, and was returning to Nome from Gambell, Alaska. The flight departed Gambell about 1455. During a telephone interview with the NTSB investigator-in-charge on February 7, at 1015, the pilot related he was flying the next to last leg of a flight that originated in Nome, with stops at Kaltag, Alaska, and Gambell. He said he filled the airplane's fuel tanks prior to departing Nome, and believed he had 4.5 hours of fuel aboard. He related he boarded nine passengers in Gambell, and that there were eight students and their adult coach, traveling to St. Michael, Alaska, to participate in a basketball game. While en route to Nome, he said he noticed the airplane was very low on fuel, and he became concerned about reaching Nome, where he had intended to refuel prior to proceeding to St. Michael. The pilot radioed the Nome FAA Flight Service Station, and told them he was low on fuel. Prior to reaching Nome, he said his fuel supply became exhausted, and both engines subsequently quit. He selected a forced landing site near the shoreline, and intentionally landed with the landing gear retracted. The airplane slid to a stop, and everyone was able to exit the airplane. The U.S. Army National Guard transported the students to Nome via helicopter. FAA inspectors from the Fairbanks Flight Standards District Office went to the accident site on February 10. They noted substantial damage to the right wing and fuselage. They drained the lowest fuel sumps on each wing into a 12 ounce bottle. The total fuel they were able to drain was approximately 5 ounces. The inspectors noted the airplane had accrued 4.2 hours on the Hobbs meter since it had departed Nome. They said the fuel caps sealed properly, the fuel tanks did not appear to be leaking, and that there was no fuel stains on the airplane suggesting any in-flight leaks. The pilot noted in his written report to the NTSB that there were no preaccident mechanical problems with the airplane.