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Nenana gas exploration well spuds Drilling under way after a delay of several days because of Minto Flats forest fire; no immediate fire threat to the drill site; $15 million well targeted to 10,500-11,000 feet with Arctic Wolf No. 2 rig Alan Bailey Petroleum News
Drilling is finally under way at the much anticipated Nunivak No. 1 natural gas exploration well on Alaska Mental Health Trust Land about 3 miles west of the town of Nenana in Alaska’s interior. The well spudded at 6:45 p.m. on July 8, Jim Mery, vice president for lands and natural resources for Doyon Ltd., told Petroleum News July 9.
A significant gas discovery in the Nenana basin, located in close proximity to a major highway, the Alaska Railroad and the Alaska Railbelt electrical intertie, could help alleviate high energy costs in Fairbanks and perhaps change the dynamics of the current debate about how to deal with pending gas shortages in Southcentral Alaska.
It should take about 48 hours to drill the surface hole and case the well to 2,500 feet, Mery said. Denver-based Rampart Energy is drilling the 10,500- to 11,000-foot well using the Doyon Drilling Arctic Wolf No. 2 rig, in partnership with Doyon, Usibelli Energy and Arctic Slope Regional Corp., at an estimated cost of $15 million.
Forest fire Rampart had planned to start drilling a few days earlier, but a major forest fire just a few miles from the drill site put that plan on hold, until fire fighters determined that it was safe to proceed.
“We are in very close coordination with Division of Forestry fire personnel (several times each day) and they advised us that the situation is stable enough to get started on the surface hole casing program,” Mery said. “The fire is about 6 miles away and hasn’t moved very much in our direction in the last two days.”
The fire is burning mainly in black spruce stands, while the drill site, in an area of less flammable cottonwood, is very defendable were the fire to move towards the site, Mery said. The Division of Forestry has deployed an extensive sprinkler system around the perimeter of the drilling pad; 20 firefighters are stationed nearby; water bomber aircraft are available; and there are several large water trucks on site for wetting the pad perimeter, if necessary, he said.
Heavy-duty bulldozers at the well site could cut fire lines through the vegetation surrounding the pad.
“We are obviously concerned, but see no current threat to safety of the crews, or the rig and support equipment,” Mery said. “The Division of Forestry folks are doing a great job monitoring the fires, developing contingency plans, communicating with the public and getting appropriate assets in place in order to protect, not just our project, but the numerous remote cabins throughout this area.”
Gas prone The Nenana basin, with geology somewhat similar to that of the prolific Cook Inlet basin some 250 miles to the south, is generally considered to be natural gas prone, although Doyon thinks that the basin also has some potential for oil and propane.
The current exploration of the basin dates back to 2002, when Denver-based Andex Resources purchased a state exploration license for 500,000 acres of state land near Nenana. Andex also negotiated oil and gas leases on about 41,000 acres of Doyon land and 9,500 acres of Alaska Mental Health Trust Land. Doyon is the Native regional corporation for the Alaska interior.
In the spring of 2005 Andex, by then working in partnership with Doyon, ASRC and Usibelli Energy, contracted PGS Onshore to carry out a 2-D seismic survey in the basin. But in 2006, faced with uncertainties regarding future Alaska gas production taxes, Andex pulled out of the project.
In 2007, encouraged by a tax break for in-state gas in the new state production tax, known as ACES, the Nenana project began to move forward, with Rampart joining the project in November 2008.
The Nunivak No. 1 well is the first well to be drilled in the deep part of the Nenana basin — two previous wells drilled in 1962 and 1984 only penetrated the shallow basin margins.
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