Vol. 25, No.39 Week of September 27, 2020
Providing coverage of Alaska and northern Canada's oil and gas industry

Hilcorp does aerial survey over Doyon land in Yukon Flats basin

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Kay Cashman

Petroleum News

Aaron Schutt, president and CEO of Doyon Ltd., updated the attendees of the Sept. 17 Resource Development Council’s meeting on the Native corporation’s oil and gas exploration agreement with Hilcorp Alaska in the Yukon Flats sedimentary basin (see map in the print and pdf versions of this story).

Entered into in late 2019, the agreement covers 1.6 million acres of Doyon-owned mineral rights in the Yukon Flats subregion where the corporation has long seen oil and gas potential. (There are more than 10 million acres in the greater Yukon Flats area, most under federal ownership as part of the Yukon Flats National Wildlife Refuge.)

“This summer Hilcorp ran an aerial gradiometry program over the entire portion of the basin, including over the federal lands between our lands from Fort Yukon all the way west to Stevens Village,” Schutt said.

“I want to recognize them for that work. As you know, with COVID it is extremely difficult to get equipment and personnel across borders and into Alaska, and especially doing work in rural Alaska. We were really excited they were able to get that program done,” he said.

Hilcorp is in the process of analyzing the results from the airborne survey: “We know that they did get great data in the sense that they got all the data they wanted, and it was high quality.”

“We’re really excited to see what comes next with the program as Hilcorp moves forward with their plans,” Schutt said.

Birch Creek area

When Doyon, the Native regional corporation for Interior Alaska and the largest private land owner in the state, first announced the deal with Hilcorp they said the airborne gravity survey would be followed by the opportunity for seismic and a drilling program, with the initial focus of exploration in the Birch Creek area.

The airborne gravity survey and data analysis, to be done in 2020-21, was to be the first phase and involve a grid flown over the 1.6 million acres of Doyon land to define opportunities by measurement of subsurface rock properties.

Phase 2, a seismic survey in 2022-23, depended on data gathered and analyzed in phase one, with the areas of interest near Birch Creek, Fort Yukon, Beaver and Stevens Village.

Pending results from the first two phases, exploration was to take place near Birch Creek in the third phase, with the agreement designed to provide maximum participation from the village corporation to provide economic benefits to the area. Doyon said it had also signed a cooperation agreement regarding a joint pursuit of service contracts and shareholder training and hire with Tihteet’ Aii, the Birch Creek Alaska Native village corporation.

First exploration work

Referencing the Yukon Flats map in his Sept. 17 RDC virtual presentation, Schutt said the green portion of the map was the sedimentary portion of the Yukon Flats basin. The purple and yellow squares are Doyon lands, he said, with the purple where Doyon shared the acreage with the local village corporations and the yellow where Doyon owned the surface and subsurface.

“So, within the 10 million acre sedimentary basin … we own a couple million acres,” he said, noting the land is “pretty close to the trans-Alaska pipeline and the Dalton Highway.”

There has been work in the basin before, Schutt told Petroleum News in a Sept.22 email.

“Texaco gathered seismic data in the Yukon Flats in the early 1970s; their focus was 2D. Louisiana Land and Exploration, LLE, went into the Kandik area adjacent to Yukon Flats in the ’70s as well (Doyon pushed them over to that basin although their primary interest was the Yukon Flats),” he said.

Exxon came in, in the 1980s joined by Amoco. “Their focus was on the perimeter of the basin looking for source rocks including shallow core drilling. Exxon’s primary interest was near Birch Creek,” Schutt said.

“Exxon negotiated on a concurrent basis (1) an exploration lease option agreement with Doyon for oil and gas rights, (2) separate surface use agreements with the three villages, and (3) a surface use agreement with Doyon for its surface acreage which ended up mirroring the village agreements on commercial terms.”

In the winter of 1988-89, “Exxon gathered approximately 280 miles of 2D helicopter-supported Poulter type seismic along several widely spaced lines. Between 20-30 percent of the data was gathered on federal refuge lands. There was significant shareholder hire over the course of the program,” Schutt said.

In March 1989 the Exxon Valdez oil spill “resulted in Exxon and Amoco withdrawing from Yukon Flats exploration and pretty much all Exxon wildcat efforts in Alaska for over a decade,” he said.

Doyon work begins in 2008

The next exploratory activity was done by Doyon starting in 2008, with the most accomplished in 2010 and as late as 2012, when a 2D seismic program was conducted.

“All of that was done near Stevens Village which is in the farthest west part of the Yukon Flats basin,” Schutt said in his RDC presentation, whereas “Exxon and Amoco were really focused around the central part of the basin, so the Birch Creek, Beaver, and Fort Yukon blocks … right in the middle of that green blob” on the map.

Land swap, USGS survey

Doyon’s Yukon Flats program was delayed for five years as the corporation and the U.S. Fish and Wildlife Service tried to negotiate a land swap in the region. That effort failed; meanwhile new geologic data, including the results of a USGS gravity survey in the basin, pointed to some existing Doyon land as being more prospective than the Native corporation had originally thought and, in fact, threw into question the value of the land swap plan.

In particular, the gravity survey indicated the presence of a series of subbasins within the overall Yukon Flats basin, with most of these subbasins having depths in excess of 8,000 feet.

A subsequent oil and gas assessment by Petrotechnical Resources of Alaska, or PRA, estimated the possible existence of 300 million to 1 billion barrels of oil in the basin, and perhaps 1 trillion cubic feet of natural gas, an assessment that opened the possibility of an oil field equivalent in size to the North Slope Alpine field under the forests and marshes of the Yukon Flats.

And with some of the prospective subbasins not too distant from the trans-Alaska oil pipeline, Doyon is now focusing on oil and gas exploration opportunities in its existing Yukon Flats lands, working with Hilcorp and the communities that support development.


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