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Vol. 17, No. 51 Week of December 16, 2012
Providing coverage of Alaska and northern Canada's oil and gas industry

Doyon files plan for Nunivak #2 well in Alaska’s Nenana basin

Doyon Ltd., the Native regional corporation for Alaska’s interior, has filed a plan of operations for its Nunivak No. 2 exploration well, in the Nenana basin 50 miles or so southwest of Fairbanks. The plan, filed with Alaska’s Division of Oil and Gas, says that the corporation anticipates drilling the well between June and August 2013, with construction of the well pad and an access road taking place over the winter.

Gas exploration

For several years Doyon has been exploring for gas in the Nenana basin, a large depression in the Earth’s crust filled with river- and lake-borne sediments, primarily of Tertiary age. The proximity of the basin to the road, rail and power transmission line corridor between Anchorage and Fairbanks makes the potential of a gas find in Nenana particularly appealing — gas from Nenana could provide a source of energy for power generation or could perhaps be piped to Fairbanks, to alleviate that city’s cripplingly high energy costs.

Doyon had been exploring the basin under the terms of a state exploration license but has recently converted the bulk of the license area into state oil and gas leases. In partnership with Rampart Energy Co., Arctic Slope Regional Corp., Usibelli Energy LLC and Cedar Creek Oil & Gas Co., Doyon conducted seismic surveys in the more southern part of the basin in 2004 and 2005, supplementing some Shell seismic data from the 1980s that Doyon had licensed and reprocessed.

Nunivak No. 1 well

In 2009 the partnership drilled the Nunivak No. 1 well, about three miles west of the town of Nenana.

The well did not encounter an economic gas accumulation but provided intriguing evidence for the hydrocarbon potential of the basin. Samples from some of the coal seams that are thought to pervasive in the basin and that would form the primary hydrocarbon source, were found to contain hydrocarbons that appeared to have formed from the heating of the coal, rather than from the bacterial decomposition of organic debris. Soil samples from land over the basin contain trace quantities of a similar hydrocarbon mix. And a merging of data from the Nunivak No. 1 well with the seismic data and with proprietary gravity and magnetic data led to a complete re-assessment of the basin, a re-assessment that has pointed to much greater maximum basin depths than were previously thought to exist.

Although the basin has long been thought to be gas prone, Doyon has said that, with some parts of the basin perhaps as deep as 25,000 feet, there is the possibility of oil as well as gas in the basin.

Seven miles west

Encouraged by its findings from the Nunivak No. 1 well, Doyon is going to drill the No. 2 well about seven miles west of that first well. The new well will test a large structural closure in direct contact with the deeper part of the basin, James Mery, Doyon’s senior vice president, land and natural resources, has told Petroleum News.

But Doyon’s erstwhile partners have dropped out of this new exploration venture — the Nunivak No. 2 well will be a 100 percent Doyon project, Mery told Petroleum News in a Dec. 12 email.

In the winter of 2011-12 Doyon, also operating by itself, conducted a seismic survey in the more northerly part of the basin.

Road extension

According to the plan of operations for the new well the construction of a gravel access road to the well site will involve a six-mile westward extension to the access road constructed for the No. 1 well. The road runs within a city of Nenana right of way for access to agricultural land on the west side of the Nenana River. Equipment using the road has to cross the river by barge.

A 1.6 mile spur road will extend to the well pad from the road that is in the right of way, the plan says. The well location is section 7 of township 4 south, range 9 east, Fairbanks Meridian.

The 600-foot by 300-foot gravel drilling pad will support the drilling rig, processing facilities, a personnel camp, fire-fighting water, fuel, hazardous material storage, waste storage and vehicle parking.

Mery told Petroleum News that Doyon expects to use Nabors Rig 99, but that an agreement with Nabors has yet to be finalized.

—Alan Bailey

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Doyon to conduct survey in Yukon Flats

Doyon Ltd. the Native regional corporation for the Alaska interior, will shoot a 3-D seismic survey in the Stevens Village area of the Yukon Flats this winter, James Mery, Doyon’s senior vice president, land and natural resources, told Petroleum News in a Dec. 12 email. SAExploration will conduct the survey, which will cover an area of about 50 square miles, Mery said.

For a number of years Doyon has been investigating the resource potential of the Yukon Flats basin, a sediment-filled depression in the Earth’s crust between the trans-Alaska pipeline and the Canadian border. The corporation thinks that the basin has significant potential for holding both oil and gas resources. And new assessments of geophysical data for the basin have revealed the existence of several sub-basins within the main basin.

Doyon had decided to conduct a new seismic survey in the basin this winter but had not determined which of the sub-basins to tackle: The corporation was considering a reconnaissance 2-D survey over a sub-basin near the village of Birch Creek, or a more focused 3-D survey at Stevens Village, where the corporation has already shot a 2-D reconnaissance survey. The corporation has now opted for the Stevens Village survey, which, the corporation has said, would be used to identify specific drilling targets.

—Alan Bailey