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Drillers near target at Nenana gas well Well passes depth of 7,000 feet on its way to zones where gas may be found; target depth for $15 million well 11,000-15,000 feet Alan Bailey Petroleum News
Excitement is building on a gravel drilling pad a few miles west of the Parks Highway and the town of Nenana in Alaska’s Interior as the Nunivak No. 1 well, the first exploration well to test one of the deeper sections of the Nenana basin, augurs its way towards its target, with the drillers watching for an up-kick in the drilling mud flow rate that might indicate that the well has hit gas.
Drilling has paused at 7,000 feet while the drill string is pulled from the hole for a routine blowout preventer pressure test, said Jim Mery, vice president for lands and natural resources for Doyon Ltd, during a July 24 tour of the drilling site. The target depth for the $15 million well is 11,000 to 11,500 feet, although the geology becomes interesting below about 8,500 feet, he said.
Meantime a cluster of pipe sections were hanging vertically from the rig derrick, like an oversize package of dark spaghetti, ready for reinsertion into the well once the pressure test had been completed.
“We’ve got 9,500 feet (of pipe) on board right now,” said Doyon toolpusher Charlie Huntington.
Smoke from the Minto Flats forest fire a few miles away darkened the sky to the north of the drilling pad, but with the pad surrounded by cottonwood rather than the more flammable black spruce, with fire protection arrangements in place and with the fire not moving in the direction of the drilling operation, the drilling had been able to proceed uninterrupted, after a delay of a few days in spudding the well while firefighters assessed the situation.
Denver-based Rampart Energy is drilling the well on Alaska Mental Health Trust land using the Doyon Drilling Arctic Wolf No. 2 rig, in partnership with Doyon, Usibelli Energy and Arctic Slope Regional Corp.
Target on a saddle The 2,000-acre prospect being tested consists of a dome-like, three-way closure, set against a major fault system that demarks the eastern side of the basin, between a 14,000-foot-deep section of the basin to the south and a 20,000-foot-deep section to the north, Mery said.
“We’re working right in the middle of a saddle, which we think is a good place where gas could migrate from both source areas,” he said.
So far, the well has mainly encountered sand, albeit with quite a high mud content in places, Mery said.
Results from a 1984 ARCO well drilled in the shallow southern margin of the basin indicate that at depth the basin could prove to be a prolific source of natural gas, with a good possibility of some propane in the gas, Mery said.
“That’s one of the pieces that’s encouraged us,” he said.
Arctic exploration rig The Arctic Wolf rig is a relatively small and mobile exploration rig, designed for use in severe winter conditions on the North Slope but trucked down to Nenana in 50 loads by Doyon. In fact, the drilling crew has removed most of the walls from the rig, to maintain reasonable temperatures when working inside the rig during the warm summer conditions that prevail in the Alaska Interior. And the crew, used to working on the bleak, snow-covered Arctic plain, is experiencing the novelty of seeing lush trees around the well pad.
“I’ve been in this business 30 years and I’ve never been in a rig where we saw trees,” said veteran driller Mike Krupa, Doyon Drilling’s training director. “… These guys love this.”
Krupa said that, with a capacity to pull a drill string load of 400,000 pounds, the rig would come close to its maximum drilling depth when it reaches its subsurface target at Nenana. But, regardless of its modest size, this modern rig boasts state-of-the-art drilling technology, including an AC top drive and a measurement-while-drilling system that uses pulses transmitted through the drilling mud in the well to enable the drillers to communicate with downhole instrumentation, with a computer-driven display at the rig floor continuously depicting the location of the bit relative to the planned well trajectory.
“All of the drilling today is done in real time,” Krupa said. “The smart tool that’s downhole will send signals up that are read continuously, which will tell them exactly where that bit is.”
To make corrections to the direction of drilling, the drillers fit a mud-motor-driven bit at the bottom of the drill string, an operation that requires the entire string to be removed from the well and then re-inserted. A slight bend in the mud motor assembly, rotated by the drillers into a precise orientation, causes the well to curve into the required direction. Once the well trajectory has been corrected, rotary drilling, with the top drive powering the drill bit by turning the entire drill pipe string, can be resumed.
Logistical challenges But almost equally as challenging as the actual drilling is the logistical operation of setting up and maintaining an exploration drilling site, even a site as close to a main road as the one at Nenana. The drilling rig, a miniature industrial facility with generators, mud-pumps and mud-processing equipment, as well as a drilling control room, derrick and rig floor, sits at the center of a 3.5-acre gravel drilling pad that also houses living accommodations for the drilling crew, as the crew works around the clock in two 12-hour shifts.
A construction team manned by Fairbanks-based Brice Inc., and a joint venture involving the Yukon Flats village corporations from Birch Creek and Stevens Village, constructed a more than 4-mile gravel road from the Nenana River to the well site, in addition to clearing and building the drilling pad. Fairweather E&P Services managed the construction project.
Road construction involved the placement of four temporary bridges across creeks, with both the road and the bridges being substantial enough to bear the trucks and other heavy equipment that require access to the drilling site. The road for the most part follows an existing right of way, but starts on the west side of the Nenana River — the opposite side of the river from the Parks Highway — thus requiring a continuously stationed barge to ferry heavy gear across the river.
Construction work required 30 to 32 people, nearly 80 percent recruited locally, during the winter, Mery said. Drilling involves 50 to 80 people over a 30- to 50-day period, plus support personnel, including people involved in catering, housekeeping, road maintenance and barge operations, he said. Experts in topics such as directional drilling, drilling fluids, well geology and mud logging come on site at various times.
Gas potential But, is all of this effort and expense justified, given the risk that the Nunivak well could fail to find a viable gas resource?
“We think the (entire) area has 1 trillion to 6 trillion cubic feet of natural gas potential, although we’re really focused on the 1 trillion to 2 trillion to 3 trillion area,” Mery said, “… (and) we still believe that there are some oil possibilities out here.”
And, although the Nunivak prospect itself could hold as much as 200 billion cubic feet of gas, a median estimate of 60 billion cubic feet is more likely.
“It could be smaller; it could be larger. We just don’t know,” Mery said. “… We just felt that this was the best first place to look. … We like things that we saw in the seismic.”
The primary commercial objective of the project is to find a gas resource that could be piped to Fairbanks and the neighboring town of North Pole. The gas would provide a welcome new energy source for heating residential and commercial buildings, but larger scale industrial uses for the gas, in particular power generation and oil refinery use, would need to underpin the economics.
“You really need to have those (industrial) markets to … be able to justify … not just building a pipeline to Fairbanks, but also further exploration and development out at Nenana,” Mery said.
That would likely require about 10 billion cubic feet per year for 15 to 20 years, he said, adding that it might nevertheless be possible to justify a pipeline development with a Nenana gas resource as low as 100 billion cubic feet. It would probably take four to five years to build out the gas infrastructure sufficiently to support a gas transmission line from Nenana, he said.
But with a smaller gas find — say in the 60 billion- to 70 billion-cubic-foot range — construction of a gas-fired power station at Nenana is another possibility, especially since the Alaska Railbelt electrical intertie passes close to the Nenana basin.
“Power generation we see as a tremendous opportunity, and we would need to find a significantly less amount of gas,” Mery said.
On the other hand, if the Nenana basin is found to hold a large gas resource, a gas pipeline to Anchorage is a possibility, to bolster Southcentral Alaska gas supplies pending a long-term solution to the region’s energy supply issues.
Incremental opportunities And the various possible applications for Nenana gas could be brought on line incrementally, depending on how the exploration results pan out.
“With a little bit of success you can be working with power producers,” Mery said. “With a little more success you can bring pipeline gas to Fairbanks. Maybe with a boatload of success … there’s an Anchorage option as well.”
The sale of propane, via the nearby river or road system, is another possibility.
But what happens next will depend on what the Nunivak well encounters as the drill bit grinds its way into its target. A successful find will trigger some downhole seismic acquisition, to refine the existing 2-D seismic, followed by some winter 3-D seismic data acquisition across the entire prospect, with a view to conducting some further drilling in 2010, Mery said. The exploration partners are also interested in doing some 2-D seismic surveying in the deep northern section of the basin, although the existence of wetlands and a state game refuge in that area would present some exploration challenges.
“We do think that parts of that northern area actually have great promise,” Mery said.
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