New well for Doyon in 2016: company hopes to fuel Interior Alaska.

• Author: Stricker, Julie
• Position: SPECIAL SECTION: Natural Resources

Doyon, Limited is hoping for some luck. The Fairbanks-based Alaska Native corporation announced in August that it plans to drill a third well in the Nenana-Minto basin. While the first two showed promising signs of hydrocarbons, Doyon officials hope the third time will deliver enough natural gas, and hopefully oil, to fuel Interior Alaska.

Doyon was created under the 1971 Alaska Native Claims Settlement Act. It is one of the top ten Alaska-owned companies, owning more than a dozen for-profit companies in fields such as oilfield services, government contracting, tourism, and resource development. It has 19,200 shareholders. In 2014, it had after-tax profits of $23 million on revenues of $363 million.

Doyon President and CEO Aaron Schutt announced the plans for the new well in a rare press conference. Standing at a dais in the lobby of Doyon's headquarters, Schutt plunged right in.

"Last winter, we ran an extensive 3D seismic program just west of the community of Nenana," he says. "We processed the data, got recommendations on next steps and were very excited to announce the well."

Toghotthele No. 1

Doyon is hoping the well, called Toghotthele No. 1, will provide commercial quantities of natural gas and oil.

"We are very excited to begin the next phase of our exploration program," Schutt said in a news release announcing the well. "Building on promising results from each of our earlier programs, we have substantially reduced exploration risks to a point that we estimate the chance of success for a developable gas find is one in two, and one in five for oil. An oil or gas discovery would be great news for our companies, shareholders, residents of Interior Alaska, and the state."

The geology is promising, Schutt says. In the past decade, Doyon has done extensive 2D and 3D mapping of the area, about sixty miles southwest of Fairbanks. The most recent mapping, completed in 2014, identified several drilling opportunities in a fifty-square-mile area.

"We can see world-class rocks that provide good top seals," he says. Doyon found gas in both its Nunivak No. 1 and Nunivak No. 2 wells, but believe broken top seals had let much of the gas in those locations escape. Toghotthele No. 1 is about equidistant between the first two wells, about seven miles west of Nenana.

"Certainly the basin has generated a lot of gas," he says. "The basin should also generate oil. Looking at the structure in this location, we're very, very optimistic." Schutt says experts...