Even though all oil and natural gas production in Alaska occurs either on the North Slope or in the Cook Inlet basin, the rest of the state is known to contain hydrocarbons.
That’s why the state of Alaska maintains an exploration license program, where operators can propose exploration activities in regions without regular lease sales.
Every April, the Alaska Department of Natural Resources accepts applications for exploration licenses over areas between 10,000 and 500,000 acres. The applicant proposes a geographic area as well as a work commitment and a term. The process allows other companies to make competing bids, in an effort to get the best deal for the state.
There are currently five active and two pending exploration licenses.
Cook Inlet Energy LLC operates three licenses, which are discussed in greater depth in the profile for Miller Energy Resources LLC. They are the 62,909-acre Susitna Basin IV license active through April 2021, the 45,764-acre Susitna Basin V license active through April 2022 and the 168,581-acre Southwest Cook Inlet active through October 2018.
Usibelli Coal Mine Inc. operates the 204,883-acre Healy Basin license active through January 2021. The license is discussed in greater detail in the profile of Usibelli.
The two pending licenses are in the Houston-Willow basin and North Nenana basins. The state is still considering the requests and has yet to release the names of those applicants.
Another shot at Glennallen
The remaining license is in the Interior region.
In December 2013, the state issued a five-year license in the Tolsona Lake area to Ahtna Inc., the Alaska Native corporation for the Glennallen region. The license covers 43,492 acres west of the community of Glennallen and requires a $415,000 work commitment.
The license is in the Copper River basin, where previous exploration companies have drilled as many as 11 wells. The most recent explorer was the Texas-based independent Rutter and Wilbanks Corp., which discovered a natural gas reservoir between 2005 and 2007 but eventually plugged and abandoned its well because of geological problems.
“Our primary focus is to lower utility costs for most consumers,” Ahtna Land and Resource Manager Joe Bovee told the Alaska Support Industry Alliance Meet Alaska conference in January 2014. The high cost of energy is believed to be the cause of a 10-15 percent population decline in the region over the past few years, Bovee said.
The corporation has reprocessed some 80 miles of existing 2-D seismic data and, in October 2014, commissioned Global Geophysical Services to conduct a 2-D seismic survey covering some 40 miles. Early analysis of the seismic is pointing toward a target on the crest of a geologic structure about 14 miles west of Glennallen, according to Bovee, who has expressed a 60 to 70 percent likelihood of encountering natural gas.
The company is currently expecting to drill by early 2016, according to Bovee.
The Ahtna program is focusing on the Nelchina sands, which are a highly pressurized, porous and permeable gas-bearing sandstone in faulted blocks over an area of roughly 120 square miles. Information from the existing seismic data suggests the potential for gas reservoirs between 4,000 feet and 12,000 feet in the exploration area, Bovee said.
