Vol. 26, No.26 Week of June 27, 2021
Providing coverage of Alaska and northern Canada's oil and gas industry

Going for Interior

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Hilcorp plans Yukon Flats basin test drilling program for this summer

Alan Bailey

for Petroleum News

Hilcorp Alaska is planning a stratigraphic test drilling program in the Yukon Flats basin in the Alaska Interior this summer, Luke Miller, Hilcorp manager for Alaska government and public affairs, has told Petroleum News.

“This summer, we plan to execute a shallow stratigraphic test program to better understand the geology of the Yukon Flats basin,” Miller said. “We are working closely with Doyon and nearby communities to minimize impacts, including transporting the portable drilling rig via helicopter. We remain optimistic about the resource potential of the Yukon Flats basin and the local economic activity it could generate if successful.”

According to data published by the Alaska Oil and Gas Conservation Commission, the company has obtained permits to drill up to 15 wells in the basin. The potential wells are all located in a block of Doyon Ltd. subsurface land around the villages of Birch Creek and Fort Yukon, in the central part of the basin.

Doyon land

Doyon, the Alaska Native regional corporation for the Alaska Interior, owns several blocks of prospective subsurface land in the basin and has long been interested in the potential for finding and developing oil or gas in its land holdings. As previously reported in Petroleum News, in late 2019 Hilcorp entered into an oil and gas exploration agreement with Doyon for the basin. And in the summer of 2020 Hilcorp conducted an aerial gravity survey of the entire basin. Hilcorp has expressed particular interest in exploration of the Birch Creek area. The company has previously indicated an intent to conduct a seismic survey prior to carrying out any drilling, but now appears to be proceeding with drilling using existing basin data.

“We’re really excited to see what comes next with the program as Hilcorp moves forwards with their plans,” Aaron Schutt, president and CEO of Doyon, said in September 2020 in response to Hilcorp completing its gravity survey.

The Yukon Flats basin

The Yukon Flats consist of an 11.1 million-acre lowland area around the Yukon River, between the trans-Alaska oil pipeline and the Canadian border. Much of the land in the flats comprises the Yukon Flats National Wildlife Refuge. However, in addition to the blocks of Doyon subsurface, some surface land is owned by village Native corporations.

The Yukon Flats basin consists of a sunken region filled with sedimentary strata under the flats, probably deposited within the past 70 million years. There are several relatively deep sub-basins within the overall basin. The likely relatively high temperatures deep in these sub-basins could be conducive to the formation of oil and gas. Hence, the prospectivity of the basin.

In 2004 the U.S. Geological Survey published a new assessment of the basin. The assessment estimated that there might be anywhere within the range of zero to almost 600 million barrels of technically recoverable oil in the basin, with a mean of about 173 million barrels. The corresponding figures for natural gas consisted of a range from zero to almost 15 trillion cubic feet, with a mean of about 5.5 trillion cubic feet. Natural gas liquids estimates range from zero to 350 million barrels, with a mean of almost 120 million barrels. The zeros at the lower ends of these ranges presumably reflected the fact that nobody had yet demonstrated the definite existence of any technically recoverable oil and gas in the basin - this is a promising but truly frontier play.

Existing data

There are some existing gravity, magnetic and seismic data sets for the basin. In 2011 Doyon commented on its recent interpretation of the data, saying that the Birch Creek sub-basin has subsurface structures that could have trapped oil or gas. The Native corporation has also been interested in another sub-basin at Stevens Village, in the western side of the overall basin.

Petrotechnical Resources of Alaska, a consultancy firm that has worked for Doyon in its investigations of the basin, conducted an assessment of the basin a number of years ago. The company commented that there could be an oil field on the scale of the North Slope Alpine field somewhere in the basin.

Hilcorp’s exploration interests

Hilcorp’s traditional business model focuses on the rejuvenation of aging oil and gas fields. On that basis the company originally entered the Alaska oil and gas industry to take over operatorship of many of the legacy oil and gas fields in the Cook Inlet basin. Later, the company bought into some of the oil fields on the North Slope, subsequently becoming a major North Slope field owner and operator.

In recent years, however, the company has taken significant interest in exploring for new oil and gas resources in the Cook Inlet region. The company’s exploration in the region has included new drilling at Deep Creek on the Kenai Peninsula; drilling at Seaview and Whiskey Gulch near Anchor Point on the peninsula; seismic surveying on the Iniskin Peninsula on the west side of Cook Inlet; and a continuing exploration project in the federal waters of Cook Inlet southwest of Kachemak Bay. The company’s new project in the Yukon Flats basin appears to be a continuation of this exploration interest.

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