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Independent wants to drill Umiat oil field in southeastern NPR-A Arctic Falcon Exploration’s point man in Alaska, Mark Schindler of Lynx Enterprises, handled Alpine permitting and Native agreements for ARCO Alaska Kay Cashman PNA Publisher
Arctic Falcon Exploration is planning an exploratory drilling program at the Umiat oil field on the eastern edge of the National Petroleum Reserve-Alaska near the “community” of Umiat, population five.
The Colorado-based company is the third small independent in the last year to announce plans for oil and gas exploration on Alaska’s North Slope. Arctic Falcon follows in the footsteps of Alaska-based Winstar LLC and Kansas-based Alaska Venture Capital Group LLC. Winstar hopes to drill a step-out well at the northern boundary of the Kuparuk unit and AVCG recently partnered with BP to permit an exploration well near Gwydyr Bay. (See related story on page 7 of this issue.)
Arctic Falcon, which acquired its NPR-A Umiat lease and nearby Gubik-area state lease from its sister company, R3 Exploration, earlier this year, launched “aggressively” into meetings with state and federal permitting agencies in February, a state agency source recently told PNA.
But by late spring, the company had seemingly backed off the project.
“Not so,” Mark Schindler, president and CEO of Lynx Enterprises Inc. in Anchorage, told PNA Oct. 17. “The project is still alive. Gary Nydegger is taking time to make sure he has all his bases covered on the business plan before he proceeds.”
Lynx Enterprises, solely owned by Schindler, was hired by Nydegger to be Arctic Falcon’s agent in Alaska.
Nydegger, currently the sole owner of Arctic Falcon and one of several owners in R3 Exploration, told PNA he has been tied up on drilling projects in the Powder River Basin in Colorado, where he has been “putting oil and gas deals together, from cradle to grave, for several years.”
Permitting will probably be resumed, Nydegger said, in time to permit a well for the winter of 2002-2003.
“We want to do this right,” he said. “There aren’t many independents operating north of the Brooks Range. We don’t want to do a rushed program in the Arctic.”
Nydegger said Schindler was “a tremendous asset” in the permitting process. Schindler worked for ARCO for 17 years and was in charge of permitting ARCO Alaska’s Alpine field, as well as putting together Native agreements for the development. The westernmost oil field on the North Slope, Alpine lies just east of the northeastern portion of the NPR-A.
“Mark fits our M.O. We like to hire the best, most credible people available,” Nydegger said.
No pressure, no relief well Schindler’s services have already proven valuable.
According to the Alaska Division of Governmental Coordination, Arctic Falcon is looking at drilling an initial oil exploratory well from the U.S. Geological Survey’s Seabee well pad, about one-half mile by gravel road from the Umiat airport.
The project would require an oil spill contingency plan to be approved by the Alaska Department of Environmental Conservation, a formidable part of the permitting process, especially for an independent.
Based on the fact that there is no pressure — and therefore no blowout potential — in the Umiat field, Schindler, with the assistance of the Alaska Oil and Gas Conservation Commission, was able to make a case for not including the ability to drill a relief well in Arctic Falcon’s spill plan. The cost of a back-up rig in such a remote location could have rendered the Umiat project uneconomic for the small independent.
“There is no pressure in the Umiat field. To produce the oil, to get it to flow at all, you would have to put in pumps,” Dave Houseknecht of the U.S. Geological Survey told PNA Oct. 17. Houseknecht is a member of a multi-disciplinary team using old seismic and four years of new field work to prepare a fresh evaluation of the oil and gas potential in the NPR-A.
Permafrost part of Umiat oil trap Discovered by the U.S. Navy (Umiat No. 4) in 1946, the Umiat oil field is estimated to hold between 30 million and 170 million barrels of oil. It was the first oil field discovered on the North Slope.
“The Umiat oil is reservoired in the Nanushuk formation. It’s very, very shallow and exposed at the surface. The seal for trapping oil at Umiat is thought to be partly shales of the Seabee formation and partly permafrost, rather than an impermeable rock, which you’d normally expect,” Houseknecht said.
“The depth of the oil encountered in Umiat wells ranges from 250 feet to 1,350 feet. This does not mean there is a 1,100 foot thick column of oil. It means the range of depths over which the reservoir occurs and is folded upward into an arch,” he said.
According to former U.S.G.S. geologist Marvin Mangus, who was involved in the 1940s exploration project, the Navy considered building a 6 inch pipeline from the Umiat field to Fairbanks, but elected not to do so because the $2 million price tag was too high.
Editor’s note: The nearest Anadarko Petroleum Corp. prospect to the Umiat oil field is 20 miles south at the Wishbone prospect. It is not currently an active prospect, although it is in Anadarko’s 5 year exploration plan.
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