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Vol. 17, No. 34 Week of August 19, 2012
Providing coverage of Alaska and northern Canada's oil and gas industry

Linc ready for big year

Australian company planning 5 Umiat wells, 3 underground coal gasification wells

Eric Lidji

For Petroleum News

When Linc Energy (Alaska) Inc. makes its second attempt to explore the Umiat oil field this winter, its program will be slightly larger than what it originally laid out last year.

The local subsidiary of an Australian independent still plans to drill as many as five wells this winter at the prospect in the Brooks Range foothills, but in addition to drilling, testing, coring and reservoir analysis, it now also plans to conduct a horizontal well test.

And Linc has set an “aggressive timeline” to bring Umiat online in five to seven years.

The Umiat work comes in addition underground coal gasification exploration in the Cook Inlet and Interior regions and a conventional gas exploration program in Cook Inlet.

Umiat viable without road

After acquiring the Umiat prospect in June 2011, Linc announced its intentions to conduct a multi-well exploration program at the field at the next winter drilling season.

With the onset of winter, though, Linc decided low snow levels in the foothills affected its ability to build a snow road. A snow or ice road is crucial for accessing the remote prospect, some 80 miles west of the trans-Alaska oil pipeline and Dalton Highway.

So Linc delayed its program by one year.

While the 2012 edition is similar the 2011 edition, Linc expects the program to be enhanced by a year of additional technical work, 3-D seismic processing and interpretation, project development and community engagement. In addition to three community meetings in Anaktuvuk Pass and Nuiqsut over the winter and early spring, Linc launched a project specific website, www.lincenergyumiat.com, in April 2012.

This winter, Linc plans to drill as many as three vertical wells — two shallow and one deep — a horizontal well into the Lower Grandstand formation and a disposal well.

The Umiat prospect is one of the white whales of northern Alaska.

The U.S. Navy discovered the field in 1946, during its epic drilling campaign across the National Petroleum Reserve-Alaska. But the field has remained undeveloped because of its remoteness from infrastructure, historically low oil prices and insufficient technology at the time to unlock the shallow oil in a reservoir partially located within permafrost.

With high oil prices and the state considering plans to build an all-season road to Umiat, interest in the prospect increased over the past decade. The small independent Renaissance Umiat LLC announced an exploration program in 2007, but ultimately delayed drilled on numerous occasions before selling the prospect to Linc in mid-2011.

Now, Linc says it is “committed” to developing Umiat, and is studying facilities, pipeline and access scenarios “to determine the best, most efficient, plan for development.” And while a road to Umiat “would have a very positive impact on the Umiat development program,” Linc believes “Umiat could be successfully developed without a road.”

UCG online in five years

Although it hasn’t received as much public attention as its Umiat project, Linc has also been pursuing an underground coal gasification exploration program over the past year.

In late 2011, Linc spud the first hole in its Alaska underground coal gasification program, TYEX01/01X, on the west side of Cook Inlet, less than three miles from the Beluga Power Station. Linc called the results of the 1,450-foot core hole “very encouraging.”

Linc also acquired 2-D seismic over its Interior and Cook Inlet underground coal gasification acreage between September 2011 and April 2012. The company also called those results “very encouraging,” pointing in particular to its acreage in the Interior “where there is very little previous exploration drilling and very few well logs exist.”

Linc plans to drill two more exploration holes on the west side of Cook Inlet this summer and fall followed by one exploration hole in the Interior region, near Healy.

The goal of the program is to target specific sites for future commercialization.

For the upcoming exploration program, Linc commissioned a new, fit-for-purpose rotary-core rig from Buffalo Custom Manufacturing. The dual capabilities allow the rig to “drill at a faster rate and offer greater borehole stability and control than a traditional core rig.”

Linc is aiming to bring synthesis gas production online in Alaska within five years.

Underground coal gasification is a way to “create” natural gas inside coal deposits too deep to mine. The process involves injecting air and water into an ignited coal seam to synthesize the carbon and hydrogen into methane, the main ingredient of natural gas.

Linc announced its underground coal gasification plans as soon as it arrived in Alaska in early 2010, but those plans grew when the Alaska Mental Health Trust awarded the company an underground coal gasification exploration license over three large blocks.

Linc said it currently holds 167,917 acres of exploration licenses.

Waiting on unit decision

And Linc continues to pursue conventional gas targets in Cook Inlet, as well.

While much of the acreage it picked up in March 2010 recently expired after the end of its primary term, the company continues to hold one state and one Alaska Mental Health Trust lease in the Point MacKenzie region north of Anchorage. Linc recently applied to form the Angel unit around those leases and expects to have a decision in August.

The proposed unit is located just southwest of where Linc drilled the LEA No. 1 well in late 2010. Although Linc decided LEA No. 1 couldn’t produce in commercial quantities, “incorporating the data gathered during the LEA No. 1 program into our exploration model resulted in an exciting play development within the proposed Angel Unit.”



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