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Donkel/Cade apply for unit for Greater Point Thomson acreage
Kristen Nelson Petroleum News
Dan Donkel and Sam Cade have been assembling and evaluating an acreage position in state waters off the North Slope for a number of years and have now applied for formation of the Greater Point Thomson unit covering some 52,633 acres.
The unit operator will be Donkel Oil & Gas.
(See map in the online issue PDF)
The application says the men have a three-pronged approach to developing the acreage: either sell 100% of the working interest “to a competent qualified buyer who will in turn take over operations”; or bring in partners and jointly develop the acreage; or develop the leases on their own.
“Time will tell which approach is successful,” the application says.
The Alaska Department of Natural Resources’ Division of Oil and Gas is asking for comments on the unit application. The division said the unit is offshore the North Slope along the Staines River and the Arctic National Wildlife Refuge border.
In a Dec. 29 public notice the division said the application, filed Nov. 9, was deemed complete Dec. 21.
Comments are due Jan. 28 by 4:30 p.m.
Donkel and Cade The application is signed by Daniel K. Donkel and Samuel H. Cade, 100% working interest owners of the 24 state oil and gas leases which are the core of the proposed unit.
The application is for a five-year period, with a plan of exploration covering Jan. 1, 2023, through Dec. 31, 2027.
The 24 leases have been acquired over a period of time and have varying expiration dates. Twelve of the 24, 59.8% of the 52,633 acres, have an expiration date of Dec. 31, 2022; two leases, 6% of the acreage, expire Nov. 30, 2024; four leases, 16% of the acreage, expire March 31, 2026; and six leases, 18% of the acreage, expire June 30, 2028.
Formation of a unit would extend the leases.
There are five unleased tracts in the proposed unit, the application said, and one tract owned by another party; that lease owner has been invited to join the unit.
Tracts 79 and 80, the application said, “are impacted by the state-federal title dispute involving the acres along the Staines River and the ANWR border which is to our knowledge still unresolved.” Those tracts are included in the unit but, the application said, because the dispute has not been resolved, the federal government has not been notified of the unit application or asked to join the unit.
(An April press release from the Alaska Department of Law said the state is appealing a decision on the state land boundary in the area by the Interior Board of Land Appeals, which found in favor of the Bureau of Land Management.)
Cook Inlet background The application says Donkel and Cade “have advanced the development of Alaska’s oil patch while stimulating the State’s economy over the last several decades,” citing work the two have done to assemble acreage positions in Cook Inlet (with 200,000 acres sold to Apache in 2010; helping “place the Redoubt Unit into production following a sale to Forcenergy and Forest Oil in 1997”; identifying a gas opportunity in Sterling in mid-1990s, and “with joint venture partner Marathon … bringing the Sterling Gas Field into production”; transferring an offshore Cook Inlet working interest to Unocal in 1996 to form the North Middle Ground Shoal unit).
“Donkel has been active in Alaska since the mid-1980s; when his company Danco Inc. sold to Amoco, Arco and Unocal around 100,000 acres in Cook Inlet, which then was the largest such transfer in State history,” the application says.
Greater Point Thomson background “Currently, Donkel and Cade are making a business case for and actively marketing approximately 60,000 acres of Alaska North Slope and Beaufort Sea leases, including the Stinson prospect and the adjacent area east of the Point Thomson unit. The incorporation of the leases into a unit will provide synergies to remove barriers to investment,” the application says.
The 24 leases the men hold in the Greater Point Thomson unit area were “acquired at a cost of over $1.2 million in bonus bids” and have annual rental payments of some $362,000 and applicants have “built a large seismic and well database” over the last decade, the application says, have purchased 2D seismic data in the area and created “a robust regional geological model.”
The application includes an extensive discussion of work the men have done on the leases.
Work planned Further exploration is planned, including new wells and acquisition of seismic data, the application says.
The five-year exploration plan lays out milestones.
In 2023, the operator will identify outstanding data needs, initiate a data gap and alternatives analysis, engage partners and if that work is successful, begin to negotiate commercial arrangements and identify a new unit operator.
The operator is seeking proposals for a biostratigraphy and palynological study of key wells; seeking bids for petrophysical evaluation of seven key wells; reprocessing 51 line miles of 2D seismic; evaluating further seismic data for licensing; working with drilling contractors and service providers “to scope out possible drilling options”; and working with Qilak LNG and the Alaska Gasline Development Corp. to understand their needs for additional gas.
In 2024, the operator will begin project scoping for drilling permitting; update the unit’s exploration and development schedule; work with drilling contractors to finalize rig options; plan and design a 3D survey over the proposed Greater Point Thomson unit; subject to securing a funding/operating partner, plan step-out drilling, with initial focus on tracts 79 and 80 “to secure production from the oil rim of the Point Thomson reservoir”; and explore facility sharing options with the Point Thomson unit.
In 2025, the operator will begin planning and permitting for the 2025-26 drilling season, with initial focus on tracts 79 and 80.
In 2026, the operator plans to complete exploration well 1 and begin exploration phase drilling and planning and permitting for a second exploration well for the 2026-28 drilling season.
“If the first exploration well is successful and it confirms economic oil reserves on Tract 79 and 80, then immediately proceed to implement plans to drill additional wells, install production facilities and pipelines and produce oil as soon as possible.”
In 2027, after evaluating wells completed in the 2025, 2026 and 2027 drilling seasons, the operator will submit a further plan of exploration for the unit or a plan of development.
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