Tolsona No. 1: Ahtna successfully begins drilling program.

• Author: Anderson, Tasha
• Position: SPECIAL SECTION: Natural Resources

Ahtna, Incorporated announced on September 29 that drilling had begun for the Tolsona No. 1 gas exploration well. While drilling an exploration well may seem like the beginning of the process, Tolsona No. 1 was the cumulative effort of eighteen months of work--which is a "very accelerated schedule," says Ahtna Oil & Gas Development Manager Dan Lee. "Those things typically take years in the making, and we've condensed them down to a year and a half or so."

Tax Credits Essential

Ahtna Netiye', Inc. Executive VP Roy J. Tansy Jr. says that when Ahtna decided to move forward with this project, it was with the understanding that in order for the project to be economically feasible, Ahtna would need to take advantage of soon-to-expire tax credits. "The 025 Middle Earth tax basin credit [scheduled] to expire at the end of June this year put us on a very tight time schedule," he says. "Being a company that's not able to absorb these types of expenses easily, the board was at a point in which it was either going to receive the tax credits and drill or not get those specific tax credits and put off this operation," Tansy says.

Beyond significantly truncating Ahtna's schedule, this also meant the company was competing for resources with any other entities also scrambling to take advantage of the credits--resources such as industry partners, subcontractors, equipment, etc. In fact, Ahtna had originally planned to begin mobilizing a 2 million pound drilling rig, materials, and equipment much earlier this year and ultimately delayed mobilization until September 8, waiting for the rig to become available. "That's not to say the industry hasn't supported us," Lee says. Tansy and Lee say that their industry partners, including PRA (Petrochemical Resources of Alaska), Cruz Construction, Lynden, MagTec Alaska, Saxon Drilling, and Schlumberger, have been instrumental for the project.

Regional Considerations

Ahtna faced additional obstacles because of the well's location: "Not a lot of wells are drilled in the Glennallen area, so the services and support for an oil and gas operation really aren't there," says Marty Lemon, PE, of PRA, which is providing drilling support services. "The logistics definitely are a challenge," with equipment coming from both Kenai and the North Slope.

The well itself is challenging. "It's a relatively shallow well, but there's high pressure water in the area," Lemon says. High pressure water is more difficult to control in a larger...