Finding out for Holitna exploration license

The Alaska Department of Natural Resources has issued a preliminary finding for a proposed Holitna basin gas-only exploration license. Comments are due Sept. 30 and the Division of Oil and Gas said Aug. 1 that it expects to make a final finding available in November.

The 26,880-acre license proposal is from Holitna Energy Co. for an area near the confluence of the Holitna River and Basket Creek approximately 10 miles southeast of Sleetmute, and would allow the licensee to explore for conventional and nonconventional gas resources.

Holitna Energy applied in July 2004 to convert shallow natural gas applications filed in May 2003 to an exploration license, after the Alaska Legislature ended the state’s non-competitive, shallow gas leasing program, commonly referred to as the coalbed methane program.

Holitna Energy has said the gas produced on its acreage will likely be used to supply power and heat for the Donlin Creek mining project and for nearby villages.

The state said recent studies found poor potential for commercial quantities of oil in the Holitna and poor to fair potential for commercial quantities of gas, with the absence of visible porosity in outcrop samples from a second study suggesting low reservoir potential. “However,” the state said, “suitable porosity and permeability might have been preserved in potential reservoir rocks at depth, allowing entrapment of any hydrocarbons generated within the basin.”

The state said estimated gas potential in the basin is 100 billion to 200 billion cubic feet, “which, although not commercial, could be used for local consumption.”

—Petroleum News