A third well for DoyonNative corporation has decided to drill another Nenana basin exploration well ALAN BAILEY Petroleum News
Doyon Ltd., the Native regional corporation for the Alaska Interior, has decided to drill a third exploration well in the Nenana basin, the corporation announced on Aug. 13. The corporation anticipates drilling the well, called the Toghotthele No. 1, during the summer of 2016. Doyon has already drilled two wells, the Nunivak No. 1 and No. 2 wells, in state leases in the central part of the basin, west of the town of Nenana. The Toghotthele well will be in the same general area, about 7 miles west of Nenana, between and about 2 miles to the north of the previous two wells.
“We are very excited to begin the next phase of our exploration program,” said Aaron Schutt, president and CEO of Doyon, when announcing the drilling decision. “Building on promising results from each of our earlier programs, we have substantially reduced exploration risks to a point that we estimate the chance of success for a developable gas find is one in two, and one in five for oil. An oil or gas discovery would be great news for our companies, shareholders, residents of Interior Alaska and the state.”
Prospective for oil and gas The Nenana basin, a large sediment-filled basin southwest of the city of Fairbanks, has long been thought to be prospective for natural gas. For several years Doyon has been spearheading exploration of the basin and has found evidence that the basin may hold oil as well as gas. The corporation’s exploration program has included 2-D seismic surveys in the basin in 2005 and 2012, and the two Nunivak wells, one drilled in 2009 and the other drilled in 2013. A 3-D seismic survey, conducted in the winter of 2014-15, added detail to the results of previous 2-D surveys in the area of Doyon’s drilling interest.
Doyon is exploring in about 400,000 acres of state of Alaska leases in the basin and owns subsurface rights to an additional 40,000 acres. The basin is particularly appealing as an exploration target because of its proximity to Alaska rail, road and power transmission routes. The basin is 60 miles from Pump Station 7 of the trans-Alaska oil pipeline, 70 road miles from oil refineries at North Pole and close to the route of a proposed major gas pipeline for exporting natural gas from the North Slope.
There are two deep sub-basins in the Nenana basin as a whole, one in the north and one in the south of the basin. Doyon has been focusing its efforts on an area between the two sub-basins, an area into which oil and gas may have flowed from deeper levels. And samples from the Nunivak wells, while not demonstrating commercial pools of hydrocarbons, have shown the existence of “wet gases” such as propane, butane and pentane, materials that form in the same way as oil, from the heating of rocks containing organic materials. Doyon has previously said that geophysical data have indicated basin depths conducive to the temperatures and pressures needed for the generation of both oil and gas.
Prospect upgraded James Mery, Doyon vice president for lands and natural resources, has told Petroleum News that the recent 3-D survey that Doyon conducted west of Nenana confirmed the appeal of a prospect previously identified from a 2-D survey. The 3-D survey has enabled Doyon to upgrade the site to a drillable prospect, Mery said. The survey had also pointed to a second prospect and provided two leads towards other possible prospects, he said. The planned well will focus on that first prospect, an upthrown, faulted block.
“We’re looking at multiple zones of interest, starting around 7,000 feet and going down a little deeper than 9,000 feet,” Mery said.
Mery said that Doyon plans to use much of the infrastructure and road layout that the corporation had built for its previous drilling ventures, but that the Toghotthele well will require a short new road section, north of the existing gravel road that serviced the Nunivak wells. The service road is on the opposite side of the Nenana River from the Parks Highway: Doyon uses a barge arrangement to transfer people and equipment across the river.
Construction of the new road section will take place during the coming winter, Doyon says. Drilling operations will also require a new gravel pad.
Doyon says that “Toghotthele,” the name of the new well, is the name of the local Native village corporation at Nenana. The name is Athabascan for “hill on the water,” a reference to a prominent topographic feature north of Nenana, Doyon says.
Exploration interests Doyon also has oil and gas exploration interest in the Yukon Flats basin, a large sedimentary basin north of Fairbanks. For the time being, the corporation is focusing its exploration efforts on the Nenana basin, where there is a time limit on the duration of the state leases that Doyon currently owns, Mery said. Doyon does not face the same type of deadline in the Yukon Flats, where the Native corporation owns the subsurface lands that include its exploration targets.
Moreover, exploration success in the Nenana basin, with its proximity to infrastructure, would bode well for future exploration in the Yukon Flats, another Interior Alaska basin, Mery said.
Schutt commented on the importance of state exploration tax credits in the economics of Doyon’s exploration program.
“The state has been a great partner in our efforts to create a new industry with new jobs producing new local fuels, and creating new tax bases in Interior Alaska,” Schutt said. “We look forward to continuing that partnership.”
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