|
Linc proposing unit at Point Mackenzie Aussie independent wants to investigate geologic feature encountered by a previous well and subsequent seismic acquisitions Eric Lidji For Petroleum News
As it continues to pursue ventures across the state, Linc Energy (Alaska) Inc. plans to return to its first Alaska well next year to investigate some intriguing geologic features.
The domestic subsidiary of an Australian-based independent is asking state officials to form the Angel unit on some 1,932 onshore acres in the Cook Inlet basin. The proposed unit would cover a neat rectangle including pieces of one State of Alaska lease and one Alaska Mental Health Trust Authority lease near Point Mackenzie, north of Anchorage.
In its application, Linc proposed a two-year exploration program including seismic acquisition and drilling, followed by a potential development plan in late 2014 or 2015.
The Alaska Department of Natural Resources is taking comments through July 10.
The program would investigate a geologic “feature” of the Pittman Anticline that extends into both the Tyonek and Hemlock formations. “At the Tyonek depth the structure appears largely as a southwest plunging nose with four-way dip closure at crest. At the Hemlock (or equivalent) depth, the four-way dip closure appears to expand into a larger, more expansive closure,” Linc wrote in its application to the state. Additionally, the company said, recent seismic acquisitions showed “strong amplitude anomalies” and “apparent velocity-induced depressions of seismic reflectors over the crest of the feature,” indicators that “would be expected in the presence of gas charged sands.”
In the first year of exploration, Linc would acquire 3-D seismic over the proposed unit area as well as 2-D seismic extending to the east, beyond the proposed unit boundaries.
In the second year, Linc would drill a well into the Tyonek/Hemlock interval. With successful results, Linc would submit an application for a participating area within the unit and building infrastructure sometime around late 2014 or 2015, at the earliest.
If Linc failed to meet any of those deadlines, the unit would terminate and it would lose the acreage. Although both leases expired on June 1, 2012, Linc said it has been in discussions over the unit with land managers from both agencies since October 2011.
Chasing LEA No. 1 Linc drilled the LEA No. 1 well some 13,000 feet north of the proposed unit in November 2010, just nine months after arriving in Alaska. Although the well encountered several gas-bearing coal seams, after subsequent tests Linc decided the structure was “too tight” to produce without “swabbing” the well with large amounts of formation water.
“The conclusion from the testing is that although gas is trapped within the coal, there is not sufficient natural fracturing in the coal to allow for the recovery of commercial quantities of gas,” Linc said in May 2011, while noting the well had encountered a “significant” coal seam that “appears to be highly suitable for Underground Coal Gasification,” perhaps even enough to support future development in the region.
At the time, Linc Energy CEO Peter Bond said, “At the end of the day exploration is a numbers game, the more smart wells you drill the more likely you are going to be successful. Linc Energy has an extraordinary record of getting our exploration targets right the majority of the time and I still think the coal measures we’ve discovered via the LEA No. 1 program will add a lot of value to the company in the longer term.”
In addition to the previous Linc well, Pan American Petroleum Corp. drilled the Big Lake USA No. 1 in 1968 some 4,000 feet to the east and also encountered gas prone intervals.
Unitization needed Given the scant exploration history, Linc said it is “the only company that has expressed any interest at any time within the past 40 years in developing the acreage within the proposed Angel unit.” With the general lack of interest in the region, failing to unitize the leases would be “tantamount to condemnation” of the region for future lease sales.
“While other lessees and potential lessees have been unwilling or unable to develop that Angel prospect, Linc is willing to make that commitment,” Linc wrote to the state.
Although Linc holds five leases in the area, covering some 14,758 acres, its proposed unit includes only a small portion of two of those leases. The company pointed to state regulations requiring a unit to cover the minimum area needed to cover a potential hydrocarbon accumulation. The small portion of the two leases “encompass the extent of the seismic amplitude anomaly as interpreted by Linc with currently available data.”
Because of precedent cases, Linc is concerned it might be denied unitization on the grounds of being the sole working interest owner in the leases in the proposed unit.
Although permitted, single-lessee units are seen as less necessary than multiple-lessee units because unitization isn’t needed to aide private negotiations. In previous cases, such as the West McArthur River unit and the Badami unit, the state approved unitization in spite of single lessees, citing other reasons why unitization served the public interest.
Linc said unitization is necessary in its case, in part, because its State of Alaska lease completely surrounds the non-contiguous Alaska Mental Health Trust Authority lease.
Umiat project website In addition to its conventional gas exploration in Cook Inlet, Linc is exploring for oil and investigating the potential of Underground Coal Gasification development in Alaska.
Linc holds an Underground Coal Gasification exploration license from the Alaska Mental Health Trust Authority in three areas of the Cook Inlet region and the Interior.
The company also plans to drill five wells at the Umiat prospect on the North Slope this winter and recently launched a website for the project at www.lincenergyumiat.com.
Linc arrived in Alaska in March 2010 after purchasing 123,000 acres of Cook Inlet area state and Native leases from San Francisco-based GeoPetro Resources in March 2010. The company later acquired the Umiat prospect from a subsidiary of Renaissance Alaska.
| 