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Vol. 25, No.31 Week of August 02, 2020
Providing coverage of Alaska and northern Canada's oil and gas industry

Armstrong North Fork 3D & Doyon well data to be released

Kay Cashman

Petroleum News

The Alaska Department of Natural Resources, Division of Oil and Gas published a notice July 28 announcing the upcoming release of exploration seismic and well information, specifically PGS Onshore’s 2010 southern Kenia Peninsula North Fork 3D seismic survey and Doyon Ltd.’s Nenana basin Totchaket 1 well data.

The division said it would make the information available to the public no less than 30 days following the notice.

Discovered in 1965

The history of the North Fork field goes back to 1965 when Chevron predecessor Standard Oil Company of California encountered gas in two zones in the Tyonek formation while drilling the North Fork Unit No. 41-35 well as part of an oil exploration program. There was no interest in natural gas development at the time, so the field lay undeveloped for many years, during which time ownership of the unit changed hands several times.

Armstrong Cook Inlet, an affiliate of Denver-based Armstrong Oil and Gas, acquired the unit in 2007, subsequently re-entering the 41-35 well, contracting with PGS for a 20 square mile 3D seismic survey and drilling several new wells.

Anchor Point Energy, the midstream company formed by Armstrong and its partners at North Fork, subsequently built a 12-mile pipeline to Anchor Point on the Kenai Peninsula coast, to hook up with another gas line that Enstar Natural Gas Co. constructed south from the existing pipeline infrastructure, which eventually was extended into Homer.

Armstrong brought the field online in 2011.

Lenticular sands

Ed Kerr, then-Armstrong’s vice president of land and business development, said the 3D seismic acquired by PGS in 2010 “greatly improved the regional structural definition of the four-way anticlinal North Fork closure.”

The trick at North Fork was to find productive patches within the sandstones.

“Depositionally, these are lenticular sands, so they come and go,” Kerr told Petroleum News at the time, referring to layers of sands and mud. “We’re drilling through a package of sands.”

Additionally, and in part because of the seismic results, the state agreed to expand the North Fork unit and its Gas Pool No. 1 participating area to the west.

North Fork became increasingly important as an anchor development for the southern Kenai Peninsula, a region at the time that had many known but undeveloped prospects.

In early 2014, Miller Energy Resources of Tennessee announced it purchased the North Fork field from Armstrong in a $65 million deal. Miller subsidiary Cook Inlet Energy was to operate the field.

Hunt for oil, gas in Interior Alaska

Petroleum News has reported on Doyon’s search for oil and gas in the Nenana basin since the Native regional corporation for Interior Alaska partnered with others in 2004, took over as operator in 2009, and drilled what would prove to be its last well, Totchaket 1, in summer 2018.

Drilled in the northern part of the basin on the east side of the Tanana River about 20 miles north of the town of Nenana, the Totchaket 1 well was drilled with Nabors rig 105 to a vertical depth of 11,225 feet.

It encountered multiple gas shows but did not find commercial amounts of oil or gas, Doyon partner Cook Inlet Region Inc. reported following drilling and testing.

CIRI said that, based on drilling results so far, it continued to view the Nenana basin as holding considerable resources.

All in all, five wells were drilled - three in the basin’s central saddle, and two wells in the deeper more northerly part of the basin, above the presumed oil and gas kitchen.

Doyon’s exploration, encouraged by pervasive evidence of oil and gas throughout the program, was carefully planned and executed, targeting potential traps identified from 2D and 3D seismic and related data (gravity, magnetics, lake-bed geochemical survey, etc.).

But in 2019 Doyon decided to halt the program, allowing its 20 state leases (approximately 100,000 acres) in the area to expire, with the last of the group terminating in June of that year.

Aaron Schutt, Doyon president and CEO, confirmed this in an email to PN on April 15, 2019: “Doyon is not pursuing further work in the Nenana basin at this time. As with all investments, a time comes when you have to make a decision to go forward or not. Following Totchaket 1, we decided not to continue.”

A Doyon shareholder who asked not to be identified told PN at the time, “our geoscientists were pursuing an idea we had for the area. … We’ve given it a good try, but … perhaps someone with a new idea will come in and see what they can find.”

Doyon’s focus, he said, was returning to a more typical approach, that of a lessor, referring to the subsurface rights the Native regional corporation holds for approximately 400,000 acres in the Nenana basin.

Time-equivalent Kenai Group

The Nenana basin is located close to the Parks Highway, to the southwest of Fairbanks. Doyon had been particularly focused on making an oil discovery, although the basin is also highly prospective for natural gas, per the division.

Doyon had indicated that, given the convenient location of the Totchaket project site, a development could be viable at an oil price of around $50 per barrel, even with a relatively small discovery of perhaps 40 million to 60 million barrels.

If a workable oil resource had been discovered, production could have begun around 2023 to 2025, or perhaps earlier if oil were to be shipped by truck or rail to the oil refinery at North Pole, or to a trans-Alaska oil pipeline pump station.

One of several Alaska basins formed by the pulling apart of the Earth’s crust, the Nenana basin is filled with a huge thickness of non-marine Tertiary sediments. Coal seams and shales within the rock sequence have the potential to source both oil and gas, depending on the extent to which they are heated at depth. There are sands with excellent hydrocarbon reservoir potential, interlayered with shales that could form hydrocarbon traps.

In broad terms, the basin has a northeast to southwest trending hourglass shape, with a deep basin in the north and a central saddle in the narrower, central part of the basin, immediately west of the town of Nenana. The depths reached in the northerly section of the basin are thought to be sufficient to have raised the temperatures in the potential source rocks to levels conducive to oil formation.

“The prospective sedimentary section … consists of sands, gravels, conglomerates, shales and coals … thought to be time-equivalent to the productive Kenai Group in the Cook Inlet (basin),” the division said.

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