November 17, 2008 --- Vol. 14, No. 105November 2008

Babcock & Brown to drill Nenana basin well in summer 2009

Doyon Ltd. announced today that Denver-based Babcock & Brown Energy has joined a Nenana exploration partnership “to drill at least one vertical, 10,500-foot natural gas exploration well in the Nenana basin” in the summer of 2009. The planned well will be situated on Alaska Mental Health Trust land about four miles west of the town of Nenana in the Alaska Interior.

Babcock & Brown will operate the well and will also operate any gas production resulting from a gas find, Doyon said. This will be the first deep well in the Nenana basin, the corporation said.

“We’ve (now) got four partners (for Nenana exploration) — that’s Doyon, Arctic Slope Regional Corp., Usibelli Energy … and Babcock & Brown Energy Inc.,” Jim Mery, senior vice president of lands and natural resources for Doyon, told Petroleum News.

Doyon, ASRC and Usibelli Energy originally formed a Nenana partnership with Andex Resources and that led to the completion of a seismic survey in the basin in the spring of 2005, under the terms of a state exploration license. But uncertainty about state production taxes put the dampers on the planned drilling of a well as a follow up to the seismic work. And Andex eventually pulled out of the project.

Changes to the state tax legislation have given tax breaks for gas production for internal state use and that has proved crucial to moving the Nenana project forward, Mery said. The recent three-year extension of the state exploration license, which had been scheduled to expire in September 2009, was also critical to continuing the project, he said.

If commercial quantities of gas are found at Nenana the gas could be used to fuel power generation — the drilling site lies close to the route of the electrical intertie between Fairbanks and Southcentral Alaska. Other possibilities are piping the gas to Fairbanks for use there or piping the gas to Anchorage, Doyon said.

Chevron permitting four new wells at White Hills

Chevron is permitting four new wells locations at its White Hills prospect south of the Kuparuk River unit in the central North Slope, according to filings with the state.

The proposed wells are Bluebuck 6-7-9, Moropus 16-6-8, Panthera 21-6-9 and Stegodon 24-6-8. The well locations are all focused toward the northern end of the prospect.

Through its subsidiary Union Oil Company of California, or Unocal, Chevron permitted 15 well locations for the 2007-08 winter drilling season, and this past winter ultimately drilled three wells spread over the prospect, a bundle of leases stretching nearly 50 miles.

But the newly proposed well locations for this winter are all clustered to the north and northeast of just one of those wells, the Panthera 28-6-9 well completed in April.

Of the new well locations, the Panthera 21-6-9 and Bluebuck 6-7-9 sit one mile and 12 miles respectively to the north of Panthera 28-6-9, while Moropus 16-6-8 and Stegodon 24-6-8 sit a few miles to the north and northeast of the previously proposed, but as yet undrilled, Stegodon 34-6-8 well location, just to the southeast of Panthera 28-6-9.

Calling the program a “tight” venture, Chevron has declined to identify the target of the White Hills effort, or release any results from the first year of the drilling program.

Through Unocal, Chevron is the operator and majority owner of the White Hills prospect. Over the summer, Chevron brought Total E&P USA Inc., a subsidiary of the French major Total S.A., on as a 30-percent partner on the project.

See full stories in Nov. 23 issue of Petroleum News, available to subscribers online at noon Friday, Nov. 21 at

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