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Vol. 15, No. 39 Week of September 26, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Doyon pauses Nenana exploration, gathers data from Yukon Flats

Doyon Ltd., the Native regional corporation for Alaska’s Interior, has decided to put its exploration efforts in the Nenana basin on hold pending resolution of some Alaska Railbelt energy issues that will impact local natural gas markets, Jim Mery, Doyon’s vice president for lands and natural resources, told Petroleum News Sept. 17. However, the corporation has acquired some geophysical and soil data from its land in the Stevens Village area of the Yukon Flats, with a view to determining whether to seek partners for Yukon Flats oil and gas exploration, Mery said.

Nenana basin

Doyon has long been interested in the possibility of natural gas, or perhaps oil, in the Nenana basin, under an 8,500-square-mile area of lowlands, immediately west and northwest of the Parks Highway and Alaska Railroad.

The Nenana basin could perhaps prove to be a source of gas for Fairbanks, some 50 miles to the northeast.

And, given the ever tightening gas supplies from the gas fields of the Cook Inlet basin, the discovery of natural gas resources at Nenana could present some other Railbelt energy-supply possibilities, given the proximity of the basin to the Alaska Railbelt transportation infrastructure, and its proximity to the electrical intertie between Fairbanks and Southcentral Alaska.

In the summer of 2009 a partnership between Doyon, Arctic Slope Regional Corp., Usibelli Energy, Cedar Creek Oil and Gas Co. and Rampart Energy, with Rampart as operator, drilled the 11,100-foot Nunivak No. 1 well about five miles west of the village of Nenana, targeting a saddle between the northern and southern subbasins of the complete Nenana basin. The Nunivak well was the first deep well ever drilled into the basin — two earlier wells from several decades ago had penetrated the shallow basin margins.

Following the Nunivak drilling Rampart plugged and abandoned the well, and the exploration partners have not publicly reported the results of the drilling.

In April 2010 Mery said that Doyon was anticipating acquiring some seismic data in the northern part of the Nenana basin during the winter of 2010-11 — no seismic data, only gravity data, are available for that part of the basin. But Mery now says that, given some significant uncertainty in the Alaska Railbelt gas market, Doyon is postponing its seismic acquisition plan for a year.

Mery said that there are several Railbelt energy proposals, any one of which has the potential to impact the Railbelt gas market and hence the economics of gas production from the Nenana basin. Those proposals include a plan by Fairbanks Natural Gas and the Alaska Gasline Port Authority to truck natural gas as LNG to Fairbanks from the North Slope.

That “would blow quite a big hole in some of our base case models for bringing gas (from Nenana) to Fairbanks,” Mery said.

There is also a proposal to ship North Slope gas to Fairbanks through a new small-bore pipeline, and proposed state legislation to consolidate the Railbelt electric utilities into a single power generation and transmission company that might exclude third-party Railbelt power generation, he said.

Another proposal is a “bullet” gas line from the North Slope to Southcentral Alaska, although, by possibly hooking into a new gas supply at Nenana, that proposal could work to the advantage of Nenana exploration.

“So we’ve just decided to hold back for a while, to see how things develop with respect to these other projects and issues,” Mery said.

Yukon Flats

In the Yukon Flats, a 15,000-square-mile lowlands area with significant oil and gas potential around the Yukon River, between the trans-Alaska oil pipeline and the Canadian border, Doyon has been re-evaluating its position following a 2009 U.S. Fish and Wildlife Service decision not to proceed with a controversial land swap of some Doyon land for land within the Yukon Flats National Wildlife Refuge. Doyon had anticipated acquiring some refuge land over the deepest and most prospective section of the basin in exchange for some Doyon land within the flats.

But geologic and geophysical data assessed since the land swap idea was originally floated have indicated that some of Doyon’s existing Yukon Flats land is much more prospective than previously thought, so that the corporation has been focusing on the potential for oil and gas exploration in that land. Some Yukon Flats subbasins, where Doyon owns land, lie not too distant from the trans-Alaska pipeline, and Petrotechnical Resources of Alaska has estimated that there may be 300 million to 1 billion barrels of oil in the basin, with the possibility of an oil field on the scale of the North Slope Alpine field.

Analyze data

However, before deciding on whether to seek businesses interested in participating in Yukon Flats exploration, Doyon is assembling more information about the oil and gas potential in the area of Stevens Village, the location of a prospective subbasin just 35 miles from the trans-Alaska pipeline.

“We’re not actually looking for (business) partners right now in the Yukon Flats,” Mery said. “We just gathered last winter 96 miles of 2-D seismic around Stevens Village.”

And in mid-September a crew finished a project that involved gathering soil samples along the seismic lines looking for surface expressions of hydrocarbons, and gathering new, detailed gravity data from the area, he said.

The new seismic and other data will be analyzed over the next few months, and then merged with some older geophysics data sets, ready for a new appraisal of the Stevens Village subbasin. Doyon will then decided what course of action to take, whether to do further appraisal work or perhaps seek exploration partners, Mery said.

—Alan Bailey

Railbelt uncertainty

In April 2010 Mery said that Doyon was anticipating acquiring some seismic data in the northern part of the Nenana basin during the winter of 2010-11 — no seismic data, only gravity data, are available for that part of the basin. But Mery now says that, given some significant uncertainty in the Alaska Railbelt gas market, Doyon is postponing its seismic acquisition plan for a year.

Mery said that there are several Railbelt energy proposals, any one of which has the potential to impact the Railbelt gas market and hence the economics of gas production from the Nenana basin. Those proposals include a plan by Fairbanks Natural Gas and the Alaska Gasline Port Authority to truck natural gas as LNG to Fairbanks from the North Slope.

That “would blow quite a big hole in some of our base case models for bringing gas (from Nenana) to Fairbanks,” Mery said.

There is also a proposal to ship North Slope gas to Fairbanks through a new small-bore pipeline, and proposed state legislation to consolidate the Railbelt electric utilities into a single power generation and transmission company that might exclude third-party Railbelt power generation, he said.

Another proposal is a “bullet” gas line from the North Slope to Southcentral Alaska, although, by possibly hooking into a new gas supply at Nenana, that proposal could work to the advantage of Nenana exploration.

“So we’ve just decided to hold back for a while, to see how things develop with respect to these other projects and issues,” Mery said.

Yukon Flats

In the Yukon Flats, a 15,000-square-mile lowlands area with significant oil and gas potential around the Yukon River, between the trans-Alaska oil pipeline and the Canadian border, Doyon has been re-evaluating its position following a 2009 U.S. Fish and Wildlife Service decision not to proceed with a controversial land swap of some Doyon land for land within the Yukon Flats National Wildlife Refuge. Doyon had anticipated acquiring some refuge land over the deepest and most prospective section of the basin in exchange for some Doyon land within the flats.

But geologic and geophysical data assessed since the land swap idea was originally floated have indicated that some of Doyon’s existing Yukon Flats land is much more prospective than previously thought, so that the corporation has been focusing on the potential for oil and gas exploration in that land. Some Yukon Flats subbasins, where Doyon owns land, lie not too distant from the trans-Alaska pipeline, and Petrotechnical Resources of Alaska has estimated that there may be 300 million to 1 billion barrels of oil in the basin, with the possibility of an oil field on the scale of the North Slope Alpine field.

Analyze data

However, before deciding on whether to seek businesses interested in participating in Yukon Flats exploration, Doyon is assembling more information about the oil and gas potential in the area of Stevens Village, the location of a prospective subbasin just 35 miles from the trans-Alaska pipeline.

“We’re not actually looking for (business) partners right now in the Yukon Flats,” Mery said. “We just gathered last winter 96 miles of 2-D seismic around Stevens Village.”

And in mid-September a crew finished a project that involved gathering soil samples along the seismic lines looking for surface expressions of hydrocarbons, and gathering new, detailed gravity data from the area, he said.

The new seismic and other data will be analyzed over the next few months, and then merged with some older geophysics data sets, ready for a new appraisal of the Stevens Village subbasin. Doyon will then decided what course of action to take, whether to do further appraisal work or perhaps seek exploration partners, Mery said.

—Alan Bailey



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