Jumping into gas exploration: Nenana Basih gas lures joint venture to drill.

• Author: Liles, Patricia
• Position: OIL & GAS

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Interior Alaskans have long hoped for cheaper energy from the massive North Slope natural gas supplies that have yet to be tapped, a large-scale project that still remains uncertain given the current economic climate.

Finding an Interior Alaska supply of natural gas is the goal of a consortium of four business entities, including two Native regional corporations, who collectively are investing $15 million this year in summer exploration drilling. The joint venture is made up of Doyon Ltd., Arctic Slope Regional Corp., Usibelli Energy LLC and new industry partner and operator of the exploration program, Denver-based Rampart Energy. They plan to drill at least one exploration well targeting gas in the Nenana Basin, located just 50 miles southwest of Fairbanks.

The initial well, planned for a vertical depth of 10,500 feet, will be located on Alaska Mental Health Trust land located 4 miles west of the Tanana River village of Nenana.

"We have a lot of information from the seismic work completed on the surface," said Norm Phillips Jr., president and chief executive officer of Doyon Ltd., the Interior Alaska Native regional corporation. Doyon is investing the largest share of the joint-venture funds. "Now it's time to tie things together with drilling."

The first well will be drilled on a seismic line cut in early 2005, when the consortium completed 212 miles of two-dimensional seismic work in the under-explored basin, long believed to contain good potential for gas and some possibility of oil resources.

Past seismic work, coupled with other research data and proprietary basin modeling conducted by the consortium, indicates the entire Nenana Basin could contain from 1 trillion cubic feet to 6 tcf of conventional, recoverable gas, according to Jim Mery, vice president of lands and resources at Doyon.

Similar types of geologic estimates indicate gas flows from the first well this summer could provide a mean case of 60 billion cubic feet, he added.

"We hope for gas, but there's a whole range of possibilities," Mery said. "It could be a dry hole, or if it's charged up, it could be our mean case, or it could be higher."

Drilling in the Nenana Basin also carries the possibility of hitting oil, although the basin is believed to hold better potential for conventional natural gas and coal-bed methane. State geologists have estimated the Tertiary-age alluvial basin west of Nenana covers 8,500 square miles and is up to or greater than 18,000 feet deep in the northern area. The Tertiary sedimentary section is believed to be time-equivalent to Cook Inlet's productive Kenai Group.

Two holes were drilled in the shallower, southern and western portions of the sedimentary basin, one by Unocal in 1962 and one by ARCO in 1984. Unocal's Nenana No. 1 was located due west of Nenana, and that 3,062-foot hole produced coal-seam gas shows, according to a state report. ARCO's...